July 12, (THEWILL) — Nigeria has risen to become the top-performing stock market globally, achieving an outstanding record that has pushed tech-centric South Korea into the second position – a rank that Nigeria maintained at the conclusion of the first quarter of the year.
Following a recent downturn, especially in June, the strength of the Nigerian Exchange (NGX) has attracted the interest of FTSE Russell – a worldwide provider of stock market indices, benchmarks, and data solutions – for evaluating global stock market performance.
As of the conclusion of trading on Wednesday, July 8, the Nigerian stock market reported a year-to-date return of 55.81 percent. On Thursday, July 9, the benchmark index experienced a significant increase of 2.2 percent, adding 5,376.70 points, which elevated the market capitalization to 242,459.98 trillion.
Although the NGX closed marginally lower on Friday, July 10, as market capitalisation declined by N103 billion to close at N156.444 trillion, from N156.547 trillion at the previous session, and the ASI felling by 159.97 points, or 0.07 percent, to close at 243,798.76, compared with 243,958.73 recorded on Thursday, the bullish trend was almost sustained throughout the week.
The NGX sustained its bullish momentum last week as investors gained N9.34 trillion, driven largely by renewed buying interest in banking stocks and select consumer goods counters. The NGX ASI advanced by 6.35 percent to close the week of July 6, at 243,798.76 points, while market capitalisation rose by the same margin to N156.445 trillion.
Market breadth also strengthened significantly, with 60 equities appreciating, compared with 22 in the previous week. Twenty-eight stocks declined, down from 57 a week earlier, while 58 equities closed unchanged, lower than the 67 recorded in the preceding week.
The significant bull ran into the second half of the year, despite the transition to T+1 settlement system. The T+1 settlement means that securities transactions are settled one business day after the trade date, which accelerates the transfer of funds and securities.
The rally was driven by a combination of monetary easing, banking recapitalisation and improving macroeconomic conditions. A 50-basis-point reduction in the Monetary Policy Rate to 26.5 percent signalled that Nigeria’s interest rate tightening cycle had peaked, prompting investors to rotate from fixed-income securities into equities as Treasury bill and bond yields moderated.
The banking sector became the market’s biggest catalyst after 33 banks successfully met new capital requirements, collectively raising more than N4.61 trillion through rights issues, public offers and private placements. The recapitalisation exercise boosted liquidity and strengthened investor confidence in financial stocks, while expectations of stronger corporate earnings further supported demand.
Foreign portfolio investors also returned as exchange-rate stability improved and external reserves strengthened. Trading activity accelerated sharply, with monthly equity turnover more than doubling between January and March as participation broadened beyond blue-chip stocks into mid-cap and growth companies.
The momentum extended beyond banking. Oil and gas stocks led sectoral gains, while industrial companies also benefited from improving valuations and reform-driven optimism.
That broad-based re-rating laid the foundation for the market’s continued advance through the second quarter, positioning the NGX to move from being the world’s second-best performing market to the global leader in equity returns.
Crucially, this influx of capital did not remain idle. It circulated within the market, reinforcing demand for banking equities and amplifying the broader rally. Banks, in effect, transitioned from traditional dividend-paying into central vehicles for both yield and capital appreciation, particularly in an environment where fixed-income returns were steadily declining.
In a chat with Mr. David Adonri, the Managing Director of Equity Capital Solutions limited on his assessment of market performance in the first quarter, he said, “The Equities Market has appreciated so far by about 30 percent in the first quarter 2026. This is a very spectacular performance. The market has been driven by massive growth in the Industrial goods, Oil & Gas and Banking sectors.”
That rotation initially concentrated in the market’s most liquid and fundamentally strong names. January’s rally was driven by institutional accumulation in blue-chip stocks, supported by strong earnings expectations and the milestone of a N100 trillion market capitalisation.
By February, the shift had intensified into a full-scale liquidity event, with the market recording its strongest monthly gain of the quarter at 19.74 percent. Lower yields, improving macroeconomic sentiment, and the early return of foreign portfolio investors created a reinforcing cycle in which rising prices attracted more capital and fresh capital drove prices even higher.
The revision in Pension Fund Administrator (PFA) investment limits, which allows for higher exposure to ordinary shares, was a major driver for market growth during the period, contributing to notable rallies in the NGX. Pension funds were invested in companies with high liquidity, strong dividend histories, and robust corporate governance. This had led to heavy concentration in banking and top-tier financial stocks
Liquidity dynamics underscore the scale of this transition. Domestic investors laid the foundation of the rally, accounting for over 88 percent of market turnover in January. However, February marked a clear inflection point as total transactions surged 78.9 percent month-on-month to N1.54 trillion, alongside a notable resurgence in foreign portfolio inflows.
This renewed interest was supported by relative currency stability, with the naira trading within a narrow band of N1,380 to N1,410 per dollar, while external reserves strengthened to $50.45 billion –factors that helped restore investor confidence.
By March, the character of the rally had evolved. What began as a large-cap-driven scenario broadened into a wider market move. Trading volumes surged to record levels, with average daily transactions ranging between N25 billion and N30 billion.
Total monthly turnover climbed to approximately N1.85 trillion, up from N0.86 trillion in January. The market was no longer simply rising, it was deepening, with mid-cap and small-cap stocks joining the rally as investors searched for overlooked opportunities.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
