July 01 (THEWILL) — A capital market expert and investment analyst, David Adonri, has explained the significant downturn in the Nigerian Capital Market observed at the conclusion of the second quarter of 2026 – which witnessed substantial asset offloading, particularly within the equities sector, resulting in a notably bearish trend by the end of the first half of the year.
Adorin, the Chief Executive Officer of HighCap Securities Limited, a leading stockbroking firm and a registered dealing member of the Nigerian Exchange (NGX), stated that the significant asset offloading was prompted by several factors.
These include rebalancing following the earnings season, cash movements related to the upcoming elections, stocks aimed at benefiting from the oil market rally, and cash withdrawals in anticipation of the highly awaited Initial Public Offering (IPO) of Dangote Refinery.
Andorin, disclosed this information during the Capital Market Correspondents Association of Nigeria (CAMCAN) Mid-Year 2026 Capital Market Review and Outlook held in Lagos on Tuesday.
He forecasted that the equities market would gradually regain its momentum as investors react positively to stronger corporate earnings, enhanced economic indicators, and increasing confidence in Nigeria’s reform agenda.
In response to remarks suggesting that the recent significant sell-offs in the Nigerian Capital Market were linked to private placement activities at Dangote Refinery before its IPO, Andorin clarified that private placements, which are typically by invitation only, involve select high-net-worth institutional investors who are invited to participate in the deal.
This process does not involve retail investors, who make up the majority of the equities market.
He elaborated that many investors are converting their equities into cash in anticipation of the Dangote Refinery IPO, aiming to secure early positions as the IPO is expected to attract substantial global interest, particularly since it is likely to be denominated in dollars.
“Everyone is eagerly awaiting the significant Dangote Refinery IPO, which is poised to transform Nigeria’s investment landscape due to the facility’s current value. Investors are positioning themselves by holding cash in anticipation of the IPO launch, expected in July.
“The private placement involves only a limited number of participants and is strictly by invitation. Retail investors are not engaging in the Dangote Refinery private investment; they are currently on standby,” Andorin stated at the capacity-building event where he served as the guest speaker.
He elaborated that the uncertainties arising from the escalating political climate are prompting investors to liquidate their assets into cash in preparation for potential emergencies that may arise from the upcoming elections early next year.
This supports analysts’ views that numerous politicians are now concealing their assets in equities rather than in real estate and fixed deposits to evade scrutiny from anti-corruption agencies.
He indicated that stocks dependent on the sentiments surrounding elevated oil prices are currently recalibrating their positions in response to current economic conditions.
Additionally, there were inflated expectations stemming from market reforms, which prompted investors to heavily invest in specific stocks that are now starting to experience a downturn.
Noting that the weak equities market will regain momentum, Andorin cautioned that inflationary pressures, the build-up to the 2027 general elections, insecurity, simultaneous capital-raising exercises and the ongoing conflict in the Gulf region could pose significant downside risks to market performance in the months ahead.
According to him, the recent correction witnessed on the Nigerian Exchange should not be interpreted as a sign of structural weakness in the capital market but rather as a normal phase of institutional portfolio repositioning following the strong rally triggered by economic reforms.
“The current market correction is a result of institutional investors repositioning their portfolios and not an indication of a breakdown in market fundamentals,” he said, adding that investor sentiment remains largely supported by improving macroeconomic conditions.
Adonri projected a mild recovery in the equities market in the second half of the year, driven by stronger corporate fundamentals and better earnings prospects across listed companies.
He also predicted that the current high interest rate environment would persist, although he expects Exchange Traded Products (ETPs) to witness a realignment in valuations with their underlying fundamentals as market conditions improve.
In addition, he said the activation of the commercial papers and derivatives markets would deepen Nigeria’s capital market, broaden investment opportunities and improve liquidity.
Nigeria’s equities market entered the second quarter of 2026 on the back of one of its strongest rallies in nearly two decades. By May, the Nigerian Exchange (NGX) had pushed the benchmark All-Share Index (ASI) to a record 252,508.20 points, while market capitalisation climbed to an all-time high of ₦161.80 trillion, extending year-to-date gains beyond 60 percent.
The momentum, however, reversed sharply in June. By the close of the month, the ASI had retreated to 229,419.18 points, while market capitalisation fell to ₦147.22 trillion, erasing about ₦14.58 trillion from investors’ holdings in just a few weeks. June alone accounted for approximately ₦13.29 trillion of the losses, making it the largest monthly destruction of shareholder value in the history of the Nigerian Exchange in nominal terms.
He concluded that while the reform-driven rally in the Nigerian capital market has entered a phase of correction, the underlying fundamentals remain intact, expressing optimism that the market is well-positioned to recover gradually in the second half of 2026 as institutional investors complete their portfolio adjustments and economic reforms continue to gain traction.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
