……. Institutional Repositioning, Not Market Weakness, Driving NGX Correction — Adonri Predicts Stronger H2 Recovery
Nigeria’s equities market is expected to post a gradual recovery in the second half of 2026, buoyed by stronger corporate earnings, improving macroeconomic fundamentals and sustained economic reforms, despite persistent inflation, elevated interest rates and political uncertainties ahead of the 2027 general elections.
This projection was made by the Chief Executive Officer of HighCap Securities Limited, David Adonri, during the Capital Market Correspondents Association of Nigeria (CAMCAN) Mid-Year 2026 Capital Market Review and Outlook held in Lagos.
Adonri explained that the recent decline in the Nigerian Exchange (NGX) should not be interpreted as a sign of weakness in the capital market but rather as a normal phase of institutional portfolio realignment following the strong rally that followed Nigeria’s ongoing economic reforms.
According to him, institutional investors are simply adjusting their investment portfolios to reflect changing market conditions and emerging opportunities, stressing that the underlying fundamentals of the market remain solid.
“The current market correction is a result of institutional investors repositioning their portfolios and not an indication of a breakdown in market fundamentals,” Adonri said.
He expressed confidence that as listed companies continue to deliver stronger financial results and macroeconomic conditions improve, investor confidence will strengthen, supporting a moderate rebound in the equities market before the end of the year.
Economic Reforms Boost Investor Confidence
Adonri noted that Nigeria’s reform programme has continued to receive positive recognition from international financial institutions and global rating agencies.
He pointed out that the International Monetary Fund (IMF) has acknowledged improvements in Nigeria’s macroeconomic environment following key policy reforms, while international credit rating agencies have upgraded or reaffirmed the country’s sovereign ratings.
According to him:
S&P Global Ratings upgraded Nigeria’s sovereign credit rating from ‘B-‘ to ‘B’ with a Stable Outlook in May 2026.
Fitch Ratings maintained Nigeria’s ‘B’ rating with a Stable Outlook.
Moody’s Ratings upgraded Nigeria from ‘Caa1’ to ‘B3’, reflecting improved confidence in the country’s economic management.
He attributed these positive assessments to increased foreign exchange stability, rising external reserves, improved crude oil production and the government’s commitment to structural economic reforms.
Stronger Economic Growth Expected
Adonri also highlighted encouraging growth projections for the Nigerian economy.
According to him, both the IMF and the World Bank project Nigeria’s economy to grow by 4.1 per cent in 2026, while the Central Bank of Nigeria (CBN) forecasts a stronger 4.49 per cent expansion.
He identified several factors expected to sustain economic growth, including:
Rising crude oil production;
Expansion of domestic refining capacity;
Improved foreign exchange reserves;
Greater exchange-rate stability;
A gradually appreciating naira; and
Improved corporate profitability.
These developments, he said, are expected to reinforce investor confidence and support capital market performance.
High Interest Rates to Persist
Despite the positive outlook, Adonri warned that Nigeria is likely to remain in a high-interest-rate environment for some time.
He, however, expects Exchange Traded Products (ETPs) to gradually realign with their intrinsic values as market conditions improve.
He also projected that the planned activation of Nigeria’s commercial papers and derivatives markets would deepen the capital market, improve liquidity and expand investment opportunities for both institutional and retail investors.
Dangote Refinery Listing Could Transform NGX
One of the most anticipated developments in Nigeria’s capital market, according to Adonri, is the expected listing of the Dangote Refinery on the Nigerian Exchange.
He described the proposed listing as a potential landmark event capable of significantly increasing the market’s capitalization, improving liquidity and attracting greater domestic and international investment into Nigeria’s capital market.
According to him, such a listing would further strengthen the NGX’s position as one of Africa’s leading investment destinations.
Election, Inflation and Global Tensions Pose Risks
While expressing optimism about the market’s medium-term outlook, Adonri cautioned that several risks could temper investor enthusiasm.
He identified persistent inflation, political activities ahead of the 2027 general elections, insecurity, multiple corporate capital-raising programmes and geopolitical tensions arising from the Gulf conflict as key factors capable of creating market volatility.
According to him, financial markets naturally respond to changes in the socioeconomic and political environment, making policy consistency and macroeconomic stability essential for sustaining long-term investor confidence.
He stressed that although the reform-driven rally experienced earlier in the year has entered a correction phase, the broader investment outlook remains positive.
Adonri concluded that once institutional investors complete their portfolio repositioning and ongoing reforms continue to yield tangible economic benefits, Nigeria’s stock market is well positioned to record a gradual recovery during the second half of 2026, reinforcing its role as a major driver of economic growth and wealth creation. HighCap Securities CEO David Adonri projects a gradual recovery for Nigeria’s stock market in the second half of 2026, citing stronger corporate earnings, economic reforms and improved macroeconomic fundamentals, while warning that inflation, election uncertainty and global geopolitical tensions remain key risks.
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