Olatunde Amolegbe, Managing Director of Arthur Steven Asset Management Limited and former President of the Chartered Institute of Stockbrokers (CIS), has forecast a 45.9 percent return for Nigerian equities in the 2026 financial year.
Speaking at the Capital Market Correspondence Association of Nigeria (CAMCAN) 2025 Capital Market Review and Prognosis for 2026 in Lagos, Amolegbe cited improving macroeconomic stability, pre-election liquidity, anticipated monetary easing, and major planned listings as the main drivers for the expected growth.
He highlighted upcoming listings, particularly within the Dangote Group, as key factors that could deepen market activity and broaden sector representation on the Nigerian Exchange (NGX).
Turning to asset allocation, Amolegbe said Arthur Steven is maintaining its framework from the second half of 2025, recommending a portfolio mix of 70 percent equities, 20 percent fixed income, and 10 percent cash.
“We retain an overweight position in equities, reflecting strong market sentiment and the continuation of the bull cycle,” he said, noting that the NGX All-Share Index rose over 50 percent last year, supported by naira stability, improved earnings visibility, and renewed foreign investor interest.
While fixed income remains appealing, its relative attractiveness is expected to soften as investor flows shift into risk assets amid improving macroeconomic conditions. Cash allocations are maintained to preserve liquidity and capitalise on market opportunities.
Amolegbe stressed that stabilising macroeconomic indicators, structural reforms, and renewed investor confidence position the Nigerian market for robust performance in 2026.
Under the firm’s base-case scenario, he expects the NGX to deliver a 45.9 percent return. A more optimistic scenario, driven by faster disinflation, aggressive monetary easing of 400–900 basis points, stronger corporate earnings, increased foreign portfolio inflows, and additional large-scale listings, could push returns even higher.
He cautioned, however, that risks such as sensitivity to capital gains tax and potential delays in major listings could dampen market performance.
Highlighting market drivers for 2026, Amolegbe pointed to elevated liquidity ahead of the 2027 elections, which could boost activity but also increase volatility in equities and the FX market. He noted anticipated IPOs, including the Dangote Refinery and Fertiliser listings, as well as Airtel Money’s planned separate listing, will enhance liquidity and attract broader investor participation.
Foreign exchange stability was cited as a key pillar for sustaining foreign investor interest, with carry trade opportunities in high-yield naira assets remaining attractive. Upcoming tax reforms, including adjustments to capital gains tax, are expected to reshape sector cost structures and influence investor strategies.
Overall, Amolegbe remains bullish on Nigerian equities, noting that stable macro conditions, robust liquidity, and renewed investor confidence are likely to support strong market performance in 2026.
