Onome Amuge
Nigeria’s equity market has entered 2026 with a burst of confidence that has pushed valuations to the edge of a historic milestone, underscoring how domestic investors are recalibrating risk after a year of macroeconomic adjustment and financial market volatility.
In the first trading week of the new year, investors added more than N2 trillion in equity value, lifting total market capitalisation to about N99.94 trillion and leaving the Nigerian Exchange (NGX) within striking distance of the N100 trillion mark. The rally extended the strong momentum seen at the end of 2025, when the benchmark All-Share Index (ASI) delivered a full-year return of just over 51 per cent, making Nigeria one of the world’s best-performing equity markets last year.
The gains came despite a shortened trading week, with markets open for only four sessions following the federal government’s declaration of January 1 as a public holiday. Over those four days, the ASI rose 1.92 per cent to close at a record 156,492.36 points, up from 153,539.83 the previous week, signalling that investor appetite remained robust even with limited trading time.
Market participants attribute the rally less to speculative exuberance and more to deliberate repositioning at the start of the year. After a turbulent period marked by currency devaluations, high inflation and aggressive monetary tightening, investors appear increasingly willing to look through near-term risks and focus on companies with resilient earnings and balance sheets.
The distribution of gains during the week supports that view. The market advanced in every trading session, with daily capital gains ranging from about N441 billion to N562 billion. By the close of Friday’s session on January 2, investors had added about N2.05 trillion in value over the week, driven by broad-based buying across sectors.
Trading activity also surged sharply, pointing to renewed participation after the holiday lull. Total turnover jumped to 7.82bn shares valued at ₦134.47bn across more than 150,000 deals, more than doubling the previous week’s volumes and values. The sharp increase reflects both renewed retail interest and institutional rebalancing, typical of the so-called “January effect” often observed in equity markets.
Financial services stocks dominated activity, accounting for more than three-quarters of total trading volume. Banks, insurers and other financial firms traded nearly 6bn shares worth about N67 billion, underlining the sector’s central role in Nigeria’s equity story. Investors have been drawn to banks in particular, attracted by strong interest income growth, improved asset quality in some cases and the prospect of stable dividends after a volatile macroeconomic cycle.
The banking sector index rose almost 3 per cent over the week, supported by heavy buying in names such as Access Holdings and Ecobank Transnational Incorporated. Insurance stocks were even stronger performers, with the sector index gaining nearly 6 per cent, as investors hunted for value in previously overlooked counters.
Consumer goods shares also rallied, rising more than 3 per cent as investors rotated into companies expected to benefit from easing inflationary pressures and improving consumer sentiment. Although inflation remains high by global standards, the recent deceleration has raised hopes that household demand could stabilise over the course of the year.
Beyond the headline indices, the breadth of the rally was striking. Seventy-three stocks advanced during the week, compared with just 23 decliners, producing a market breadth ratio of more than three gainers for every loser. Some of the strongest gains were recorded in smaller and mid-cap stocks, reflecting a renewed appetite for risk at the margins. Austin Laz & Company rose nearly 46 per cent to top the gainers’ table, followed closely by Aluminium Extrusion Industries and Eunisell Interlinked, which rose more than 45 per cent and 43 per cent respectively.
At the other end of the spectrum, a handful of stocks saw declines as investors took profits or adjusted portfolios. E-Tranzact International led the laggards, falling nearly 10 per cent, while First HoldCo and Livingtrust Mortgage Bank also posted notable losses. Market participants described these declines as largely technical, reflecting rotation rather than a deterioration in fundamentals.
Sector-level performance reinforced the overall bullish narrative. All six major sector indices closed the week in positive territory.
The rally was also aided by corporate actions, including the listing of additional shares by Chapel Hill Denham’s Nigerian Real Estate Investment Trust, which helped lift overall market capitalisation. REITs have been attracting renewed attention as investors seek inflation hedges and stable income streams in a high-rate environment.
Looking ahead, analysts expect the positive momentum to persist, at least in the near term, as full trading activity resumes and investors continue to reposition portfolios for the year. Cowry Research noted that January is typically characterised by fresh inflows, portfolio rebalancing and new-year optimism, all of which could continue to support equities.
“While near-term volatility cannot be ruled out, the prevailing tone remains constructive. We continue to advise investors to focus on stocks with strong fundamentals, clear earnings visibility and sustainable growth prospects,” the research firm stated.
