By Chinwendu Obienyi
Nigeria’s equities market has emerged as Africa’s standout performer so far this year, delivering a 63 per cent return in dollar terms as a sweeping banking recapitalisation programme and renewed foreign interest fuel one of the strongest rallies in its history.
The surge has added roughly N56 trillion to total market capitalisation between January and April, underscoring both the scale of investor inflows and the sharp repricing of key stocks, particularly in the financial sector.
According to data obtained from the Nigerian Exchange Limited (NGX), the All-Share Index (ASI) surged +8.72 per cent over the week. This brought its year-to-date advance to +55.69 per cent in naira and +63.50 per cent in USD, the best dollar return on the continent.
The benchmark NGX All-Share Index has been the primary driver of the gains, supported by a combination of robust first-quarter earnings, structural reforms, and improving macro sentiment. The rally marks a significant turnaround for a market that had long struggled with liquidity constraints and foreign investor exits following currency volatility in recent years.
On April 29, the index posted the largest single-day point gain in its entire history: +8,465 points in a single session, surpassing the previous record set on February 17, 2026. Total market capitalisation crossed the historic threshold of N155.900 billion at the close of April.
At the centre of the rebound is the Central Bank of Nigeria’s recapitalisation directive, which required banks to raise fresh capital to strengthen their balance sheets. The exercise triggered one of the largest waves of equity issuance in the country’s history, with lenders collectively raising more than N4.6 trillion.
Banking stocks have dominated trading activity, accounting for the majority of market turnover and driving liquidity across the exchange.
Tier-one lenders, including Zenith Bank, Access Holdings, GTCO, UBA and FBN Holdings, remain the primary targets for both domestic and foreign investors due to their size, free float, and ability to absorb large inflows without significant price disruption.
Market operators said the recapitalisation has fundamentally reshaped the investment case for Nigerian banks, enhancing their capacity for lending while improving resilience and transparency.
Chief Executive Officer, Crane Securities, Mike Eze, said, “The scale and execution of the capital raises have restored confidence. It has also deepened the market, making it easier for large institutional investors to take positions.”
Despite the rally, valuations remain relatively attractive. Nigerian banks continue to trade at price-to-earnings multiples of between six and eight times, a discount to peers in markets such as South Africa, where comparable lenders command significantly higher valuations.
Foreign interest has also been supported by Nigeria’s reclassification to frontier market status by FTSE Russell, a move that is expected to drive passive inflows estimated at between $840 million and $1 billion over time. Analysts say these flows, combined with improving corporate earnings, could help sustain momentum in the near term.
However, the next phase of the market’s evolution is likely to be more selective. With recapitalisation largely complete, investors are shifting focus from broad sector exposure to fundamentals such as asset quality, loan growth, and dividend yield.
Returns on equity are expected to moderate slightly as banks deploy newly raised capital and absorb the dilution effects of expanded share bases. Even so, stronger balance sheets are expected to support increased dividend payouts, setting the stage for heightened competition among lenders to attract and retain investors.
Also, attention will turn to the insurance sector, where pending recapitalisation reforms could trigger a similar wave of activity.
For now, Nigeria’s stock market remains firmly in rally mode. The challenge will be sustaining that momentum as the initial boost from recapitalisation gives way to a more disciplined, fundamentals-driven phase of growth.
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