The Nigerian Exchange has opened 2026 on a positive note, with the All-Share Index gaining 6.27 percent in January. The index rose by 9,757.4 points to close at 165,370.4, continuing the historic bull run that characterised 2025.
This performance reflects sustained investor confidence in Nigerian equities, despite ongoing macroeconomic challenges including currency volatility and inflationary pressures. The naira traded between $/₦1,367 and $/₦1,422.50 during the month, closing at $/₦1,386.55.
Sectors Driving Growth
Energy and financial services continue to be the most attractive sectors for investors. Banking stocks, in particular, have shown strong performance as institutions benefit from higher interest rates and improved net interest margins.
Stocks to watch in 2026 include Aradel Plc in the energy sector, Lafarge Africa in industrials, Seplat Energy in oil and gas, Zenith Bank in financial services, and MTN Nigeria in telecommunications. These companies represent a mix of value and growth opportunities across key sectors of the Nigerian economy.
What's Driving the Rally
Several factors are contributing to the continued strength of Nigerian equities. First, the relative attractiveness of stocks compared to fixed-income instruments, given real negative interest rates when adjusted for inflation. Second, improved corporate earnings, particularly in the banking sector. Third, increased foreign investor interest as Nigeria's economic reforms begin to show results.
The market is also benefiting from improved liquidity and the gradual normalisation of the foreign exchange market, which has reduced uncertainty for investors calculating returns in dollar terms.
Investment Considerations
For investors considering Nigerian equities, the current environment offers both opportunities and risks. The opportunities lie in the potential for continued capital appreciation as the economy stabilises and corporate earnings improve. The risks include currency volatility, regulatory uncertainty, and the possibility of profit-taking after the extended bull run.
Analysts recommend a selective approach, focusing on companies with strong fundamentals, proven management teams, and exposure to sectors benefiting from structural growth trends. Diversification across sectors and asset classes remains important for managing risk.
Looking Ahead
Market observers expect the positive momentum to continue through 2026, supported by improving macroeconomic fundamentals and sustained investor interest. However, they caution that volatility is likely, particularly around key policy decisions and global market movements.
For diaspora investors and international capital looking at Nigerian equities, the combination of attractive valuations, improving fundamentals, and currency stabilisation presents a compelling case for allocation to the market.
Sources: Nairametrics, Nigerian Exchange Group, ThisDay