Head of Research at Meristem Securities Limited, Felicia Awolope, says Nigeria’s recent stock market rally reflects improving macroeconomic conditions, driven largely by exchange rate stability, while warning that persistent global risks could still weigh on economic growth and market performance.
Speaking during an interview with ARISE NEWS on Thursday, Awolope said stronger macroeconomic fundamentals have boosted investor confidence, improved corporate performance and supported the sustained recovery of the Nigerian equities market.
On the outlook for the stock market, she said:
“The current rally reflects improvement in the macro environment. A major factor is the exchange stability that we’ve been able to achieve, which is one key thing that foreign investors look at. Companies are back on their feet, investors are excited, and we’ve seen them pricing the expectation of improved performance into stocks.”
Awolope said the market still has room for further growth, supported by stronger corporate earnings, expected corporate actions and increased foreign investor participation.
“There’s more momentum for the market. We have expectations of better corporate earnings, corporate actions like the listing of the Dangote Refinery, and the reclassification of the Nigerian equity market, all of which could attract new investors and support broader market performance.”
She added that the banking, telecommunications and oil and gas sectors are well positioned to benefit from ongoing economic reforms, stronger investment flows and improving macroeconomic conditions.
“Banking, telecommunications and the oil and gas sectors are well positioned to benefit from ongoing reforms, stronger investment flows and improving business conditions, which should support their growth and overall market performance.”
Despite the improving outlook, Awolope cautioned that geopolitical tensions remain a major external risk, warning that sustained disruptions in global energy markets could keep inflationary pressures elevated.
“A large part of the risks on the horizon is tilted towards crisis. The ongoing tensions between the US and Iran have a direct impact on energy prices, and every sector of the economy is affected when anything happens in the energy market. If those tensions persist, they could keep inflationary pressures elevated.”
Commenting on investor sentiment towards Sub-Saharan African debt markets, she said improving macroeconomic conditions have reduced perceived risks and strengthened investor confidence across the region.
“The risk premium is beginning to benefit from improving macro conditions. Investors don’t have to price in so much risk into debt instruments, and they are beginning to gain more confidence in the ability of these countries to meet their obligations.”
On the fixed-income market, Awolope said yields are expected to remain elevated during the second half of 2026 as government borrowing requirements and inflation risks continue to shape investor expectations.
“We expect yields to remain elevated. The federal government still has significant borrowing needs, while inflation risks are still on the horizon. Overall, money market instruments should remain attractive to investors in the second half of 2026.”
Concluding the interview, Awolope said Nigeria’s improving macroeconomic environment provides a solid foundation for sustained market gains, while urging investors to remain vigilant as global developments, inflationary pressures and capital flows continue to influence the country’s economic and market outlook.
“Investors should continue to monitor both domestic and global developments closely, as macroeconomic conditions, inflation trends and capital flows will remain key drivers of market performance going forward.”
Goodness Anunobi
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