October 28, (THEWILL) — Foreign investors have reawakened interest in Nigerian equities, with total portfolio inflows crossing N1 trillion between January and September 2025, signalling renewed confidence in the country’s capital market after years of subdued participation.
According to data from the Nigerian Exchange (NGX), foreign portfolio investments (FPIs) rose sharply compared to the same period last year, buoyed by improving foreign exchange liquidity, gradual inflation moderation, and stronger corporate earnings from key sectors.
The sustained inflows have also lifted market performance, with the All-Share Index gaining over 30 percent year-to-date and market capitalisation expanding to nearly N99 trillion. Analysts attribute this to attractive valuations in the banking, industrial, and consumer goods sectors, alongside reforms that have eased capital repatriation challenges.
Recent adjustments in the foreign exchange market have further improved investor perception, as the Central Bank’s policy realignments narrowed the parallel market gap and restored partial confidence in the naira. The combination of these factors has positioned Nigeria once again as a compelling frontier market destination.
Sectorally, the financial services and energy segments attracted the most foreign inflows, reflecting investors’ appetite for dividend-paying stocks and growth opportunities within Nigeria’s ongoing energy transition drive.
Despite the positive momentum, the market remains exposed to risks tied to global interest rate shifts and domestic policy inconsistencies. Sustaining this momentum will depend largely on continued reforms, clear fiscal coordination, and stable macroeconomic indicators through the fourth quarter.
Investor sentiment remains cautiously optimistic, with many foreign players adopting a long-term view as reforms in tax administration, foreign exchange management, and power sector liberalisation deepen.
However, analysts caution that the final quarter could see a mild round of profit-taking, particularly from short-term investors looking to lock in gains after months of sustained rallies. Even so, the broader outlook for Nigeria’s equities remains positive, supported by consistent earnings growth, monetary tightening, and a steady return of foreign capital to the market.
Ogochukwu Onwaeze
