MARKET NEWS

The naira is heading to its best performance in almost a decade as gains from economic reforms by President Bola Ahmed Tinubu continues to boost investors’ confidence and drive global capital inflows into the Nigerian economy. 

A survey by Bloomberg yesterday indicated that the naira could record an average gain of 12 per cent this year, its strongest annual gain since at least 2018.

Analysts surveyed by Bloomberg agreed that the naira would continue to appreciate in the months ahead, extending its current year-to-date gain of 8.0 per cent by four percentage points to close the year with a full-year gain of 12 per cent.

FTSE Russell, a global market assessor that serves institutional investors worldwide, has also included 30 Nigerian companies on its FTSE Frontier Index Series following last week’s confirmation of Nigeria’s reclassification from “Unclassified” to “Frontier Market Status”, effective from beginning of trading on September 21, 2026.

The listing of several large and mid-cap Nigerian companies on the global index underscored the increasing prominence of the Nigerian capital market to the global investing public, on the back of macroeconomic stability and positive outlook. 

The confirmation of the upgrade to “Frontier Market Status” by FTSE Russell Index Governance Board was sequel to favourable reports by FTSE Equity Country Classification Advisory Committee, which affirmed that there were no “no material settlement, operational or funding issues” around the Nigerian market, even with the transition from a three-day, T+2 transaction cycle to a two-day, T+1 settlement cycle. Nigeria had transited from a T+2 to T+1 settlement cycle on June 1, 2026.

Nigeria had been downgraded to “Unclassified” status in 2023 due to challenges around forex liquidity and capital repatriation as the country grappled with depleted forex reserves, overdue forex obligations, low national revenues, and a spiraling black market in the face of officially pegged but unavailable forex. 

Nigeria’s external reserves reached 18-year high of $53.99 billion on Wednesday, substantially higher than $51.04 billion 2026’s year-end target projected by the Central Bank of Nigeria (CBN).

Bloomberg highlighted that increased remittance inflows, higher oil revenues, and improved foreign exchange liquidity that arose from recent reforms have helped to stabilise the country’s foreign exchange (forex) position.

“Nigeria’s currency is headed for its best performance in almost a decade, as rising dollar inflows from higher oil prices and remittances help insulate the naira from political risks usually associated with its election season,” Bloomberg stated.

 The Bloomberg survey expected naira to end the year at N1,290 per dollar from its N1,328.92 per dollar close on Wednesday, extending year-to-date gain of 8.0 per cent to almost 12 per cent by the year-end.

With a liquid reserves of $52.5 billion, the country’s current position could support more than 12 months of imports, the nation’s strongest forex capability in recent period.

Brent crude yesterday traded around $95.5 per barrel—above Nigeria’s 2026 federal budget benchmark of $64.85—the price rebound would largely bolster the country’s fiscal revenues. With stability and improved crude production, Nigeria continues to earn more petrodollars and to support naira stability and bolster external reserves. 

Chief Executive Officer, Centre for the Promotion of Public Enterprise (CPPE), Dr Muda Yusuf, said the outlook for Nigeria’s external reserves remains positive, noting that there are no major risk factors that could derail the forex and fiscal reforms that have brought about stability and improvement in external reserves.

‘’Well, the outlook for me is positive because I don’t see anything derailing these forex reforms, fuel subsidy etc. It is these reforms that have brought about stability,” Yusuf said.

The Q2 2026 GDP Report released by National Bureau of Statistics (NBS) earlier this week showed that average daily crude oil production rose to 1.72 mbpd in second quarter 2026, outperforming both the preceding quarter and comparable period of 2025.

The crude production in second quarter 2026 was the highest since 2022. Oil production had stood at 1.68 mbpd in second quarter 2025 and 1.55 mbpd in first quarter 2026. The oil sector thus contributed 4.16 per cent to total real GDP in second quarter 2026, a sustained improvement on 4.05 per cent in corresponding period of 2025 and 3.92 per cent recorded in first quarter 2026.

The NBS report stated that Nigeria’s economy expanded further in second quarter 2026 with real GDP growth improving by 54 basis points from 3.89 per cent recorded in first quarter 2026 to 4.43 per cent in second quarter 2026. This also represented an increase of 20 basis points above 4.23 per cent recorded in comparable second quarter 2025. 

The addition of 30 companies to the FTSE Frontier Index Series is expected to further stimulate global investors’ appetite for the Nigerian market.

FTSE Russell classified the 10 large-cap Nigerian stocks as ‘Newly Eligible’. These included Guaranty Trust Holding Company (GTCO) Plc, Zenith Bank Plc, MTN Nigeria Communications Plc, Dangote Cement Plc, Stanbic IBTC Holdings Plc, Aradel Holdings Plc, First HoldCo Plc, Nestlé Nigeria Plc, Nigerian Breweries Plc and Presco Plc. 

Other listed Nigerian companies were Oando Plc, United Bank for Africa, Okomu Oil Palm Plc, Access Bank Plc, Dangote Sugar Refinery Plc, FCMB Group Plc, Fidelity Bank Plc, Guinness Nigeria Plc, Unilever Nigeria Plc, Wema Bank Plc, Custodian and Allied Insurance Plc, Fidson Healthcare Plc, Julius Berger Plc, NASCON Allied Industries Plc, Nigerian Aviation Handling Company (NAHCO) Plc, Nigerian Exchange Group (NGX Group) Plc, Vitafoam Nigeria Plc, Sterling Financial Holdings Company Plc, Transnational Corporation of Nigeria (Transcorp) Plc, U A C of Nigeria Plc and United Capital Plc.

Experts said growing international ratings and assessments were validations of the success of the economic reforms, as the federal government reaffirmed commitment to deepen reforms and engender more inclusive growth and development.

The FTSE Russell upgrade followed S&P Dow Jones Indices’ placement of Nigeria on its Watch List for potential reclassification to Frontier Market status as part of its 2027 Country Classification Annual Review, providing a further indication of growing international attention to improvements in Nigeria’s market accessibility. 

Group Managing Director, Nigerian Exchange Group (NGX Group), Mr. Temi Popoola described the FTSE Russell upgrade as “an important moment for Nigeria’s capital market”.

He said the return to Frontier Market status creates opportunity for the next phase of Nigerian capital market’s development.

He noted that the publication of the FTSE Frontier Index Series annual indicative review files for September 2026, which will reflect Nigeria’s reclassification is a milestone for the market.

“We have to turn greater international visibility into broader participation, deeper liquidity and more capital for Nigerian businesses. Our ambition is to build a market that is increasingly competitive globally and more relevant to Nigeria’s economic growth. We are encouraged by the continued support of the Federal Government and the commitment of stakeholders across the market as we work towards that ambition,” Popoola said. 

He noted that Nigeria’s return to Frontier Market status is expected to enhance the visibility of Nigerian equities within the global investment community and create further opportunities to broaden engagement with international institutional investors and deepen participation in the Nigerian market.

President, Chartered Institute of Stockbrokers (CIS), Dr Fiona Ahimie, said the upgrade should be positive development for foreign portfolio investment, as it restores the country’s visibility and eligibility within the FTSE Russell global index framework.

She explained that the upgrade places Nigerian equities back on the radar of global frontier-market investors and gives index-tracking funds the opportunity to consider Nigerian stocks within their investment universe.

“For the domestic market, the more meaningful benefits could emerge gradually through improved liquidity, broader investor participation and stronger valuations. Increased foreign participation could boost trading activity and potentially reduce the valuation discount attached to Nigerian equities, especially large and liquid stocks that are more accessible to international investors,” Ahimie said. 

Chairman, Association of Securities Dealing Houses of Nigeria (ASHON), Sehinde Adenagbe noted that the upgrade was significant because it enhances the international visibility and credibility of the Nigerian capital market.

He said: “It signals that some of the market-access concerns that previously limited Nigeria’s participation in global investment indices are being addressed. This could encourage international fund managers, institutional investors and research analysts to pay greater attention to Nigerian equities. Over time, increased visibility can improve price discovery, deepen market participation and strengthen the ability of Nigerian companies to attract international capital through the equities market.

“More importantly, the development could strengthen Nigeria’s position within the global capital-market ecosystem. Greater foreign participation would potentially increase market liquidity, broaden the investor base and improve the efficiency of capital allocation. It could also encourage Nigerian listed companies to improve corporate governance, disclosure and investor-relations practices as they compete for international capital”. 

Managing Director, GTI Capital, Mr Kehinde Hassan, said the upgrade sends a positive signal to the global investing public on tradability of the Nigerian market.

He expressed optimism that the country would remain within positive radar of global investors, rating agencies and assessors, citing continuing improvements in the country’s forex liquidity and general macroeconomic outlook.

Hassan added that the upgrade could provide impetus for a market recovery as foreign inflows improve.