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By Chukwuma Umeorah
The Association of Securities Dealing Houses of Nigeria (ASHON) has warned that political tension and policy uncertainty could weaken investor confidence and slow the growth of Nigeria’s capital market if not properly managed.
The Chairman of the Association of Securities Dealing Houses of Nigeria (ASHON), Sehinde Adenagbe urged that maintaining stability in the political environment would be critical to sustaining recent gains recorded in the Nigerian capital market, which has continued to attract stronger domestic participation despite inflationary pressures, exchange rate volatility and broader global economic uncertainty.
Speaking on the outlook of the market and factors influencing investor behaviour, he said operators and regulators must continue to work toward strengthening confidence in the financial system. “Political tension among political gladiators must be avoided at all cost,” he said.
His comments come amid growing investor sensitivity to macroeconomic and political developments, particularly as companies release audited financial statements and declare dividends for the current earnings season.
According to him, while the market outlook remains “cautiously optimistic,” investors are still closely monitoring inflation, interest rates, exchange rate stability and government policy direction before making long-term commitments. “The outlook remains cautiously optimistic. We expect continued investor interest, especially as companies release audited financial statements and dividend declarations,” Adenagbe said.
He added that sectors such as banking, telecommunications, consumer goods and energy are expected to remain active due to their strong influence on market capitalisation and liquidity on the Nigerian Exchange Limited (NGX).
He also linked the increasing participation of local investors to inflationary pressures and the search for stronger returns outside traditional savings instruments. “Second, the search for better returns amid inflation has pushed many Nigerians toward equities and other financial instruments,” he said.
He noted that improvements in digital trading platforms and easier access to investment services have also contributed to stronger retail participation, particularly among younger Nigerians.
Adenagbe said investor confidence has also been supported by positive international assessments of the Nigerian market, including Nigeria’s recent upgrade to Frontier Market Status on FTSE Russell. “This is an affirmation that confidence is being restored to the Nigerian capital market,” he said. However, he maintained that sustaining foreign investor confidence would depend largely on macroeconomic stability, policy consistency, foreign exchange liquidity and ease of doing business.
On the banking sector, Adenagbe said investors and analysts were paying close attention to the implications of ongoing recapitalisation discussions and recent regulatory directives affecting dividend payments. “Investors are also watching closely the implications of the new directive to banks on dividend payment by the Central Bank of Nigeria (CBN),” he said.
He argued that stronger capital buffers and healthier balance sheets would ultimately benefit shareholders over the long term. “The shareholders will be more rewarded in the long run as the banks’ balance sheets become healthier, bigger and stronger,” he added.
Adenagbe further advised investors to avoid speculative trading during the earnings season and instead focus on company fundamentals and long-term value. “Investors should avoid speculative decisions and focus on informed investing,” he said.
He stressed the importance of investor education in deepening the capital market, noting that institutions such as ASHON, the Chartered Institute of Stockbrokers (CIS), the Securities and Exchange Commission (SEC), and NGX Academy were expanding financial literacy campaigns to improve public understanding of investment opportunities. According to him, broader retail participation, especially among youths and women, would be important to improving market liquidity and expanding the depth of the Nigerian capital market.
