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By Chukwuma Umeorah
When the story of Nigeria’s capital market evolution is told, the year 2025 will certainly merit a prominent mention.
In 2025, Nigeria’s capital market experienced a transformative phase, with the Nigerian Exchange (NGX) posting one of its most robust performances in recent years.
Data from the NGX indicates that the All-Share Index (ASI) surged from a starting point of approximately 102,926.40 points at the end of 2024 to close at 153,539.83 points as of December 24, 2025 (the last reported trading session before the year-end holidays), reflecting a year-to-date (YTD) return of about 49.17 per cent. This outperformed the previous year’s strong 37.65 per cent return in 2024, marking the sixth consecutive year of positive annual gains and extending a multi-year bull run that has seen compounded growth since 2020.
In nominal terms, the NGX all-share index added over 50,600 points in absolute value in 2025, representing one of the largest single-year point gains since the exchange was automated in 1999. This translated to an average monthly return of about 4.1 per cent, significantly above the 10-year average of 1.8 per cent.
The performance positioned the NGX among Africa’s top-performing stock markets, with market capitalization expanding from N62.76 trillion at the end of 2024 to nearly N97.9 trillion by late December 2025. Equities, bonds, and overall market cap were profoundly influenced by these macroeconomic factors, as foreign portfolio investments (FPIs) rebounded significantly.
Data from the NGX also shows that total equity turnover for full-year 2025 crossed 1.85 trillion shares, valued at over N21.6 trillion, compared with about 1.21 trillion shares worth N13.9 trillion in 2024.
Stakeholders have attributed this positive trajectory to a backdrop of aggressive economic reforms initiated by the Tinubu administration, including exchange rate unification, banking sector recapitalization, and the enactment of the Investments and Securities Act (ISA) 2025. Despite navigating through initial volatility, the market achieved remarkable gains. These policy shifts, coupled with stabilizing foreign exchange (FX) rates and a significant deceleration in inflation, they say created a conducive environment for investor confidence and capital inflows.
Central bank and NGX data indicate that foreign portfolio investment (FPI) inflows into equities and fixed income instruments exceeded N2.1 trillion in 2025, more than double the estimated N920 billion recorded in 2024, as foreign investors re-entered the market following FX reforms and improved price discovery.
Inflation, which peaked at around 34 per cent in early 2025 following subsidy removals and FX adjustments, steadily declined to 14.45 per cent by November, beating the government’s 15 per cent target and fostering a lower interest rate environment that supported asset valuations. FX stability, achieved through unification policies, reduced currency volatility, with the naira settling around N1,450 to the USD by December, down from highs near N1,600 earlier in the year.
In real terms, the 49.17 per cent equity return translated to a positive real return of over 34 per cent, compared to negative real returns in most of the 2016–2020 period when inflation consistently outpaced market gains.
External reserves rose above $39 billion by Q4 2025, providing additional fx backing and improving investor confidence in naira asset repatriation.
2025 in retrospect
The NGX’s 2025 journey was characterized by a bullish trajectory, interrupted by mid-year dips due to profit-taking and policy uncertainties, but ultimately culminating in record highs. Building on the momentum from 2024’s 37.65 per cent gain, the ASI advanced steadily throughout the year, achieving a superior 49.17 per cent YTD return by late December. Starting the year on an upbeat note, the ASI advanced 1.5 per cent in January, driven by telecom tariff hikes and banking sector optimism. By April, the index saw modest gains of 0.36 per cent reflecting cautious trading amid rising inflation. The market’s momentum accelerated in July, with a 16.57 per cent monthly surge, the strongest since January 2024, propelled by industrial and banking rallies.
Monthly NGX data shows that July 2025 alone accounted for more than 22 per cent of total yearly market capitalization gains, driven by strong earnings releases, interim dividends and banking sector capital-raising activities.
October brought further gains, with the ASI hitting elevated points and a YTD return exceeding 41 per cent, as foreign inflows surged.
The trend, however, changed in November as the market experienced a very significant dip occasioned by several negative trading sessions. The negative sentiment, though temporary, stemmed largely from tax reform concerns. The government responded with sustained campaigns to sensitize the public and stakeholders on the details of the reforms.
The November correction wiped off an estimated N6.2 trillion in market capitalization at its peak, before the December rally recovered over 70 per cent of those losses within three weeks.
To further provide clarity for capital market investors, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, said the Federal Government’s proposed capital gains tax (CGT) framework would not affect the vast majority of participants in Nigeria’s stock market, with more than 99 per cent of investors exempted.
According to him, “investors who sell shares worth not more than N150 million within any 12-month period, with capital gains of up to N10 million, are permanently exempt from capital gains tax without any conditions. This threshold alone covers more than 99 per cent of market participants.”
He added that institutional investors such as pension funds, mutual funds and real estate investment trusts (REITs) are also unconditionally exempt, further narrowing the group of investors that could potentially be subject to CGT under the new regime.
NGX retail investor data shows that over 85 per cent of transactions on the exchange are below n10 million per trade, further supporting the assertion that the proposed CGT framework would have minimal impact on everyday market participants.
December’s Santa Claus rally pushed the index higher, with significant weekly gains in market capitalization reversing the massive losses recorded in November. Overall, trading volumes surged, with substantial equities traded throughout the year.
Sectoral performance was uneven but predominantly positive. The Industrial Goods Index led with 57.62 per cent YTD gains, followed by Consumer Goods at 122.41 per cent and Banking at 38.9 per cent. Standout stocks included NCR Nigeria, up over 1,300 per cent, Beta Glass and MTN Nigeria.
The consumer goods index posted its first triple-digit annual return since 2013, supported by FX stability, price adjustments and improved input cost management.
Banking stocks accounted for more than 38 per cent of total market turnover value in 2025, reflecting strong investor interest driven by recapitalization and earnings growth.
Domestic investors dominated trading activities, but foreign participation rose sharply. This resilience was underpinned by reforms that enhanced liquidity and transparency, building on the foundation laid in 2024.
Market reforms (ISA 2025 and banking recapitalisation)
The two most notable reforms that had the greatest impact during the year were the ISA 2025 and banking recapitalization. Enacted in March 2025, the ISA modernized Nigeria’s capital market by recognizing virtual and digital assets as securities, enhancing SEC powers, and explicitly prohibiting Ponzi schemes. Key changes included stronger investor protection, regulation of private company debt issuance, and a ban on cash transactions to boost transparency. This framework expanded the investor base, particularly in fintech and ESG sectors, and facilitated new listings.
The Act’s impact was immediate. It enabled the NGX to launch an Equity-Based Commodity Index tracking energy and agriculture firms, contributing to sectoral gains. By mid-year, enhanced collaboration between the SEC and other regulators reduced fraud and attracted long-term capital. Analysts say ISA 2025’s provisions on digital assets positioned Nigeria as a hub for crypto and blockchain investments, with private equity and venture capital explicitly recognized for the first time.
Complementing this was the CBN-mandated banking recapitalization exercise, which kicked off in April 2024, requiring banks to raise core capital to withstand risks and support the government’s $1 trillion economy ambition. By December 2025, banks had raised over N2.4 trillion through rights issues and public offers, with several institutions meeting targets ahead of schedule. This influx strengthened balance sheets and boosted financial sector resilience.
As of December 2025, more than 12 banks had substantially met their new minimum capital requirements, with rights issues accounting for about 62 per cent of total funds raised.
FX stability and exchange-rate unification
Exchange-rate unification, although announced in 2023, saw its full impact felt in 2025. By eliminating multiple FX windows, the policy reduced arbitrage and improved transparency. While the naira initially depreciated, it later stabilized, supported by CBN interventions and improved dollar supply. NGX data indicates a strong positive correlation between FX stability and equity performance in 2025, with periods of naira appreciation coinciding with increased foreign buy orders and higher market liquidity.
Inflation dynamics and pressures
Inflation dynamics in 2025 followed a volatile but ultimately moderating path. After peaking early in the year, inflation eased steadily, with food inflation declining sharply due to improved harvests and naira strength.
Fixed-income data shows that 10-year FGN bond yields declined by over 350 basis points between Q2 and Q4 2025, reflecting easing inflationary pressures and improved macro stability.
Impact on equities
Equities benefited significantly from these conditions, delivering strong inflation-adjusted returns. FX stability reduced currency risks for multinational firms, while lower inflation supported consumer demand and corporate earnings.
Impact on bonds
The fixed income market saw yields adjust downward, improving bond prices and supporting investor returns. Reforms under ISA 2025 also enabled additional green bond and corporate bond issuances, while FX stability improved Eurobond performance.
Total bond market capitalization rose above n33 trillion by December 2025, driven by FGN issuances, sub-national borrowings and new corporate bond listings.
Market capitalisation growth
Market capitalization expanded sharply from N62.76 trillion at the end of 2024 to N97.9 trillion by December 24, 2025, driven by price appreciation, new listings and banking recapitalization.
The N35 trillion increase represents an average wealth creation of nearly N96 billion per day for investors, underscoring the central role of the capital market in Nigeria’s economic transformation agenda.
Outlook for 2026
While it’s not certain what 2026 may hold, analysts project continued bullishness for the NGX, underpinned by sustained reforms, stronger macroeconomic fundamentals, and emerging opportunities in sectors like ESG investing, AfCFTA integration, and fintech. However, risks such as fiscal deficits, inflation spikes, and global uncertainties could temper gains.
Managing Director of Financial Derivatives Company, Bismarck Rewane, forecasted a “historic economic reset” for Nigeria in 2026, emphasizing a market boom, stronger Naira, and faster growth. He projected the NGX market capitalization to reach N262 trillion by 2026, driven by major listings like Dangote Refinery and NNPC, alongside improved oil earnings and policy reforms. Rewane added, “Our projection is that market capitalisation could rise to about N262 trillion by 2026 and N393 trillion by 2027,” noting this growth would stem from enhanced FX stability and non-oil inflows. He anticipates annual GDP growth of 4.1 per cent, with inflation easing further, creating a conducive environment for equity valuations.
Cordros Securities, in their December 2025 outlook, projects the Naira trading within N1,350 to N1,450 against the USD through 2026, supported by policy consistency, reduced speculation, and higher FX inflows from multilateral sources. “A more stable naira could reduce currency risk premiums and improve the attractiveness of naira-denominated assets, particularly fixed-income securities,” with positive spillovers to equities through lower import costs and boosted corporate earnings. Risks include election-related liquidity and oil price declines, potentially pushing depreciation, but overall, they see undervaluation in the Naira creating investment opportunities.
