By Chukwuma Umeorah
Nigeria’s capital market has come a long way in its 65-year journey, tracing its roots to the issuance of the first Development Loan Stock in 1946. The Lagos Stock Exchange, established in September 1960 and kick-starting trading in 1961 with only 19 securities listed, laid the foundation for organised securities trading in the country. Over the years, the market has evolved through key milestones; the rebranding of the Lagos Stock Exchange to the Nigerian Stock Exchange (NSE) in 1977 and the establishment of the Securities and Exchange Commission (SEC) in 1979 to strengthen regulation and investor protection.
The capital market is an integral part of Nigeria’s economic journey.
Since independence, the local bourse has been defined by resilience, structural reforms, repeated shocks and persistent challenges.
Over the decades, the market endured military regimes, recessions, and multiple cycles of boom and bust. The most significant structural change came in 2021 with the demutualisation of the exchange. This reform produced the Nigerian Exchange Group, creating distinct entities for regulation, trading, and services, bringing Nigeria closer to global standards. For the first time, the bourse operated as a corporate entity subject to the same transparency standards it expected of listed companies.
In his analysis of the capital market evolution, the Managing Director/Chief Executive Officer of Arthur Stevens Asset Management, Olatunde Amolegbe, highlighted that the stock market in Nigeria over 65 years has evolved on the back of specific events.
“The indigenisation decree of 1977 provided the initial boost. This was followed by the Privatisation and Commercialisation decree of the 1980s which increased stock market participation.”
While these key policies had shaped the market in the past, more recent ones including the liberalisation of FX, subsidy removal, and bank recapitalisation, have also played their roles with varying degrees of impact. The signing into law of the Investment and Securities Act (ISA) in March 2025 has been described by regulators as a turning point for the market, replacing the 2007 framework.
According to Amolegbe, “There is no doubt that the economic reforms being carried out by the present government will also be recorded as another pivotal moment for stock market growth in the annals of the country. Don’t also forget that we’ve also moved from a one Exchange country to one with multiple Exchanges trading multiple assets. The market capitalization has also grown significantly.
“It’s however clear that we do have a long way to go to achieve our full potential. A market capitalization/GDP ratio of less than 20 per cent is certainly not good enough. Our aim should be a ratio above 50 per cent.”
While showing optimism for the market going forward, he added that the “potential listing of Dangote Refinery, NNPC and other government parastatals should move us quickly in this direction.”
For some shareholders, however, the challenges are often felt more directly. National Coordinator of the Progressive Shareholders Association of Nigeria, Boniface Okezie, acknowledged that the stock market has made progress but noted that some policy decisions have hindered growth.
“One of the major issues is unclaimed dividends. Taking money that belongs to shareholders and handing it over to the government is not right. If investors had access to these funds, many would reinvest them in the market and that would help deepen liquidity,” he argued.
His comments came amid concerns that some companies and registrars continue to deny shareholders access to unclaimed dividends on the basis that they are over 12 years old, contrary to provisions of the Finance Act 2020. However, in July, the SEC clarified and directed all public companies and their registrars to stop treating unclaimed dividends older than 12 years as statute-barred, especially those declared before the enactment of the Finance Act 2020.
Okezie commended recent initiatives such as the move from a T+3 to a T+2 settlement cycle, which the NGX was working to implement in Q4 2025, allowing investors to receive payments two days after trades are concluded. But he urged regulators to go further in amending outdated laws and empowering local investors. “The government should look more in the direction of encouraging Nigerians to invest, instead of foreign players always taking the lead. This will strengthen both the market and the wider economy,” he said.
The regulators, over the years, have also taken important steps to deepen the capital market. Director-General of the Securities and Exchange Commission (SEC), Dr. Emomotimi Agama, called the ISA “a game-changer,” stressing that its implementation could propel Nigeria’s capital market valuation toward N300 trillion.
According to him, the legislation was designed to “deepen investor protection, enhance regulatory clarity, and unlock new investment channels.” Already, the Act has accelerated product approvals, provided clearer listing rules, and strengthened investor-protection mechanisms. These changes have helped restore confidence among institutional players and align Nigeria more closely with international market practices.
The Group Managing Director/Chief Executive Officer of NGX Group, Mr. Temi Popoola, described the exchange’s current strategy as one of inclusion, innovation, and cross-border integration. “We have worked closely with the Securities and Exchange Commission (SEC) to promote transparency, strengthen investor protections, and accelerate innovation in listings and product development. Our goal is to create an inclusive, globally competitive capital market,” he said.
Capital market in 2025
The year has seen notable gains for the market. As at September 2025, the All-Share Index (ASI) had surged past the 142,000 points mark, while market capitalisation stood at N89.9 trillion. By July, domestic investors had committed nearly N1 trillion to equities, while foreign participation accounted for more than a quarter of trading in the first half of the year. The recapitalisation directive of the Central Bank of Nigeria (CBN) spurred ten listed banks to raise over N2 trillion through public offers, rights issues, and private placements.
These improvements show that although there are still several areas for improvement, the current reforms have boosted investor confidence and participation in the local bourse.
Macroeconomic conditions
Macroeconomic conditions that depressed sentiment in 2023 and 2024 have shown early signs of easing. Headline inflation declined for five consecutive months to 20.12 per cent in August. In response, the CBN under Governor Olayemi Cardoso cut the benchmark interest rate by 50 basis points in September, the first reduction since 2020. Observers noted that this cautious easing, alongside improving foreign reserves, supported market optimism.
Policymakers emphasised the balance between sustaining disinflation and encouraging growth.
New regulation
Regulatory clarity and the ISA 2025 stood out as one of the biggest drivers of confidence in the market. The new statute accelerated product approvals, provided clearer listing rules, and bolstered investor-protection mechanisms. These outcomes reassured long-term institutional players who had previously been cautious, helping to restore confidence in the system.
The continued development of digital market infrastructure also made a significant difference. Automation of offerings, including e-offerings and e-dividends, as well as improvements in settlement processes, cut friction for retail investors and shortened time-to-market for issuers. The NGX and registrars reported noticeable improvements in the processing times for public offers and corporate actions, which further encouraged participation.
Another factor was the steady stream of strategic listings and primary market activity. High-profile listings and the issuance of sovereign debt instruments, including sukuk and longer-dated FGN bonds expanded the range of investment options available. These additions gave investors more choice and created fresh on-ramps for portfolio allocation into Nigerian assets.
Challenges
Despite these gains, structural constraints remain. Exchange-rate volatility continues to pressure corporations with heavy import dependence, particularly in consumer and industrial sectors where imported inputs form a significant portion of costs. Inflation, though easing, has left retail investors’ real incomes compressed, limiting broad-based participation.
Liquidity challenges remain another concern. Investors have often struggled to exit positions in periods of stress. Settlement delays and outdated payment cycles also weigh on confidence, though regulators are working to implement T+2 settlement and are considering a shift to T+1. Okezie suggested that extending trading hours would improve accessibility and align Nigeria with international practice.
While the path to growth of the market remains clear, operators insist that full implementation of the ISA 2025 is a priority. According to them, effective enforcement, sustained market education, and regulatory clarity will determine whether its promises translate into deeper listings and product innovation. Closing governance gaps, streamlining registrar standards, and addressing unclaimed dividends remain critical to restoring investor trust.
Market gains N1.18trn
The Nigerian equities market closed positive last week as investors earned about N1.18 trillion, driven by renewed interest in fundamentally strong stocks and the supplementary listing of Wema Bank Plc shares ahead of the release of third-quarter earnings reports.
Data from the Nigerian Exchange Limited (NGX) showed that the All-Share Index (ASI) rose by 1.02 per cent to close at 143,584.04 points, while the market capitalisation advanced by 1.31 per cent to N91.14 trillion. The strong performance lifted the market’s year-to-date return to 39.50 per cent, reflecting sustained investor optimism despite intermittent profit-taking.
According to the weekly market report, investors traded 8.40 billion shares worth N115.50 billion in 115,801 deals, compared to 7.68 billion shares valued at N494.13 billion recorded in the previous week. The Financial Services Industry dominated activity with 7.75 billion shares valued at N88.15 billion, accounting for 92.24 per cent and 76.32 per cent of total equity turnover volume and value respectively.
Trading was largely concentrated in Cornerstone Insurance Plc, Fidelity Bank Plc, and United Bank for Africa Plc, which together accounted for 6.52 billion shares worth N52.70 billion, representing 77.66 per cent of total volume and 45.63 per cent of total traded value.
Market sentiment was also buoyed by the listing of additional 14.14 billion ordinary shares of 50 kobo each of Wema Bank Plc on the daily official list of the Exchange on September 30, 2025. The additional shares arose from the bank’s Rights Issue of 14.29 billion shares at N10.45 per share, offered on the basis of two new shares for every three held as of March 5, 2025. With this listing, Wema Bank’s total issued shares rose to 35.57 billion, expanding its market value and contributing significantly to the week’s total gains.
Performance across sectors was broadly positive, with five of the six major indices closing higher. The Oil and Gas Index led the gainers with a 5.68 per cent increase, followed by the Commodities Index which rose 2.94 per cent, the Industrial Goods Index which appreciated 1.66 per cent, and the Banking Index which gained 1.17 per cent. The Consumer Goods Index inched up 0.13 per cent, while the Insurance Index declined by 2.02 per cent on the back of profit-taking in select counters.
Among individual performers, Eterna Plc led the gainers’ chart with a 32.8 per cent rise, closing at N37.05 from N27.90. It was followed by Nigerian Enamelware Plc, which gained 20.94 per cent to N42.45, and PZ Cussons Nigeria Plc, which appreciated 20.87 per cent to N41.70. Others included LivingTrust Mortgage Bank Plc, up 18.25 per cent to N6.09, and Eunisell Interlinked Plc, which gained 17.56 per cent to N39.50.
On the losers’ chart, Julius Berger Nigeria Plc topped with a 17.79 per cent drop, closing at N122.90 from N149.50, followed by International Energy Insurance Plc, which declined 11.08 per cent to N2.97. Union Dicon Salt Plc and AXA Mansard Insurance Plc both fell 10 per cent, closing at N8.10 and N14.40 respectively, while University Press Plc dipped 9.85 per cent to N5.40.
Market breadth was positive with 53 gainers, 43 losers, and 51 unchanged equities, compared to 32 gainers and 51 losers recorded in the preceding week signalling a sign of improving investor confidence.
Analysts at Cowry Asset Management observed that “the market’s resilience was further underscored by a stronger year-to-date return of 39.50 per cent, reflecting sustained bullish sentiment despite intermittent profit-taking.”
They added that “portfolio rebalancing and selective positioning continue to highlight investor confidence in the market’s fundamentals,” while projecting that the positive momentum could persist as investors position ahead of Q3 2025 earnings releases and corporate disclosures.
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