The Nigerian capital market has witnessed a transformation under President Bola Tinubu’s administration, with analysts citing growth in both the primary and secondary segments of the market. Key policy reforms, including foreign exchange deregulation, removal of fuel subsidies, and the recent banking sector recapitalisation, have been credited with fuelling this momentum, writes TEMITOPE AINA
2023-2025 equity trading participation analysis
Between May 2023 and April 2025, foreign portfolio participation in the Nigerian equity market increased significantly. Foreign investors accounted for 9.93 per cent of total equity trading value in 2023, rising to 32.32 per cent by April 2025. This increase reflects renewed foreign interest, driven by the easing of foreign exchange restrictions and improved macroeconomic conditions.
Foreign portfolio inflows rose from approximately N122.55 bn in 2023 to N420.32 bn in the first four months of 2025. At the same time, foreign outflows increased from N168.83 bn in 2023 to N456.80 bn by April 2025. This pattern indicates active trading by foreign investors, balancing gains and managing risks amid economic uncertainties.
Domestic investors, mainly institutional players, maintained the largest share of market activity, but their participation declined from 90.07 per cent in 2023 to 67.68 per cent by April 2025. This does not indicate a withdrawal but a more balanced market with increased foreign involvement.
Institutional investors accounted for N860.29 bn in trading value by April 2025. Retail investors contributed N935.78 bn in 2023, demonstrating steady participation from Nigerian individuals alongside institutions.
Total equity market transactions increased from about N2.93 tn in 2023 to nearly N2.71 tn in the first four months of 2025. This growth shows rising market liquidity and investor engagement.
March 2025 was remarkable, recording total transactions of N1.12 tn, with foreign investors accounting for 62.74 per cent of the volume, reflecting increased foreign activity in the market.
In 2023, foreign participation was generally below 12 per cent monthly. Foreign investors controlled 12.76 per cent of trades in January, dropped to 4.43 per cent in April, and rose slightly toward the end of the year. Domestic investors, particularly institutions, dominated the trading market.
The total trading value in 2023 was N2.93 tn. Foreign inflows were N122.55 bn, and foreign outflows N168.83 bn, indicating net foreign selling, mainly due to foreign exchange uncertainties and a tight monetary environment.
In early 2025, foreign inflows increased sharply, reaching N699.89 bn in March, making up 62.74 per cent of all trades that month. This change from net selling in 2023 to significant buying reflects growing confidence in Nigeria’s economic reforms, currency stability, and corporate earnings.
Domestic investors remain active, although their relative share has decreased. Retail and institutional investors continue to provide market stability and depth, complementing foreign investor activity.
ASI sprint defied expectations
The Chief Executive Officer of Highcap Securities, David Adonri, traced the market’s revitalisation to Tinubu’s economic policies, particularly the floating of the naira and the push for bank recapitalisation, which energised the primary market.
Adonri noted that the capital market is broadly divided into two segments — the primary market, where issuers raise funds, and the secondary market, which serves as a trading platform for investors. He said both segments have been positively impacted during Tinubu’s first two years in office.
“The capital market consists of two segments. These are the Primary Market, where fund users called issuers raise capital to finance their activities, and the Secondary Market, which serves as an investment outlet for investors,” he explained.
He continued, “President Tinubu’s two years in office have positively impacted these market segments considerably. For the past two years, capital-raising activities have escalated to levels only witnessed before the global meltdown in 2008. The mandatory recapitalisation exercise of banks formed the bulk of transactions in the primary market, while several public companies that were wounded by the floating of the naira also approached the primary market to refinance their liabilities.”
He described the situation as one where both equity and debt instruments are being issued aggressively:
“The primary market in these two years is akin to a candle that is burning from both ends. While capital raising through equities has been intensely increasing, debt capital raising by public and corporate issuers also assumed unprecedented dimensions.”
Adonri further noted that while the surge in the primary market was astonishing, the secondary market’s performance was nothing short of phenomenal.
He highlighted the rapid growth of the Nigerian Stock Exchange’s All Share Index (ASI), which crossed the 100,000 mark for the first time in history.
“In 2022, the equities market appreciated by 20 per cent, with All Share Index closing at 51,251.06, but soon after President Tinubu took office, the ASI started a frightening sprint, the kind of which had never been seen before in Nigeria,” he said.
“In 2023, ASI appreciated by 45.40 per cent, closing at 74,502.58. Nobody could have thought in his wildest imagination that ASI would fly over 100,000 to the current figure of 110,203 right now.”
The Highcap Securities boss further noted that investor confidence, particularly from foreign players, had been restored following the government’s decision to release trapped foreign funds and deregulate the foreign exchange market.
“For the first time after several years, foreign investors’ participation in the equities market surpassed that of domestic investors in the first quarter of 2025, a mark of growing foreign investors’ confidence,” he noted.
According to him, these developments demonstrate the transformative impact of Tinubu’s macroeconomic reforms on capital market activity.
“The twin policies of floating the naira and removing the fuel consumption subsidy resonated well with investors, and when foreign investors’ trapped funds were released, more interest was generated in the capital market,” he said.
Adonri explained that all sectors of the capital market have benefitted from the boom, though some, like consumer goods, initially struggled with policy-induced profit reductions before recovering.
“Every sector of the capital market has benefitted from the Tinubu boom. Initially, the consumer goods sector lagged because of the negative impacts of public policy on their profits, but they have sprung up and are now performing well since their recovery began,” he said.
However, he cautioned that retail investor participation remains subdued due to high inflation and weakened purchasing power, which have eroded savings.
“The economy is already adjusting well to the market reforms, but retail investors are hampered by erosion of their purchasing power, leaving little or no savings for investment,” he warned.
Adonri advised that sustaining the capital market boom would require the government to tackle inflation and economic imbalances using appropriate fiscal and administrative measures.
“If the factors fuelling inflation are dealt with through administrative actions and appropriate macroeconomic policies, the boom in the capital market can be sustained,” he added.
Capital Market shines amid hardship
The Managing Director/Chief Executive Officer of Arthur Stevens Asset Management Limited, Olatunde Amolegbe, has stated that despite the hardship facing Nigerians due to recent economic reforms, the country’s capital market has remained one of the most consistent bright spots under the current administration.
Speaking in an interview with our correspondent on Sunday, Amolegbe noted that while some of the reforms introduced may appear harsh and fast-paced, they were necessary to prevent total economic collapse.
“It has been two years of aggressive reform of the economy through various policy changes that some will call bold and others will call overly aggressive. The president has acted like we are running out of time as a country, and all the medicine needed to be taken at once to save our economic lives,” he said.
Amolegbe acknowledged that some analysts have called for a more sequenced and gradual approach.
Still, he argued that “no one is disputing that the changes he has implemented are not necessary if you look critically at where we are coming from as a country. It’s clear the economy was on life support and the brink of collapse before he came in.”
He pointed to several key reforms, including the floating of the naira, removal of fuel and electricity subsidies, and comprehensive tax reforms, as instrumental in boosting investor confidence. These moves, he said, have helped shore up government finances and rejuvenate market activity.
“Policies such as the floating of the naira, removal of fuel and electricity subsidies, and efforts at comprehensive tax reforms were read as positively accretive to the finances of the country, and the stock market responded positively,” he noted.
According to him, the Nigerian Exchange’s All Share Index, the benchmark indicator for stock market performance, has gained over 40 per cent in the last two years.
“We have also seen a significant return of foreign portfolio investors to our market in the last two years, and more companies are approaching the market to raise capital,” Amolegbe said.
He highlighted the Central Bank of Nigeria’s recapitalisation directive for banks as a key liquidity booster, deepening the market and creating renewed interest in equities.
In addition, Amolegbe noted the Federal Government’s increasing presence in the local fixed-income market through bond issuances to bridge infrastructural and budget deficits. “Nigeria issued its first US Dollar Domestic Bond and also issued its first Eurobond in over 10 years,” he added.
He commended the president for recently signing the new Investment and Securities Act into law, noting that it “could revolutionise our capital markets in the next few years”.
However, Amolegbe maintained that more could still be done to consolidate the gains made so far, especially in areas that directly affect businesses and households.
“For instance, the pace of privatisation and commercialisation of non-performing public assets could be increased significantly to unlock their value,” he said. “Also, efforts to lower the operational and finance costs of companies operating within the economy need to be placed on the front burner in order to increase production and reduce unemployment.”
He stressed the need to urgently address the challenges of electricity supply and insecurity, which continue to hamper food production and manufacturing.
While acknowledging the positive indicators in the capital market, Amolegbe also recognised the painful economic realities Nigerians are enduring.
“The fact is that these reforms, while necessary, have involved the citizenry having to bear significant pains, such as the ongoing cost-of-living crisis. Therefore, the government should intensify efforts at easing those challenges as the reforms work their way through the system to achieve the needed objectives,” he concluded.
Equities shine, fixed income booms
Founder of B. Adedipe Associates Limited, Dr Biodun Adedipe, presented a data-driven perspective of the market’s performance, arguing that what some interpret as market volatility is instead normal profit-taking.
He dismissed concerns over instability, pointing instead to consistent year-on-year growth of the ASI and Nigeria’s performance relative to other African and global stock markets.
“To start with, the market has not witnessed unsettling volatility because the data indicates differently. ASI grew by 34.08 per cent from May to December 2023 and 45.9 per cent for the year, then 30.4 per cent in 2024 and 6.76 per cent as of 26th May 2025,” Adedipe stated.
According to him, Nigeria’s performance has outclassed other African markets: “This performance beat hands down the South African bourse (4.3 per cent in 2023), Kenya (-44.7 per cent) and Ghana (13.9 per cent).”
Adedipe also highlighted the remarkable returns in the fixed-income market, which many investors often overlook.
“Fixed-income securities also turned in returns over 20 per cent — very rare anywhere else!” he emphasised.
He noted that while there was some cautious trading in the first quarter of 2025, fears of a correction were unfounded.
“Q1 2025 saw tepid performance in the fear of ‘market correction’, which has not happened because of the strong performance of most of the equities,” Adedipe said.
He pointed to stellar sectoral performance across key industries, explaining that in 2023 alone, banking, oil and gas, industrial goods, and consumer goods stocks saw dramatic growth compared to the previous year.
“Sectoral performance of the market in 2023 significantly bettered that of 2022 — Industrial Goods at 13 per cent against two per cent, Consumer Goods (94 per cent vs one per cent), Banking (84 per cent vs 15 per cent) and Oil & Gas (126 per cent vs 15 per cent),” he explained.
He firmly rejected the idea that the market is volatile in a negative sense, describing what has occurred instead as a natural oscillation driven by expected investor behaviour.
“What you term ‘volatility is a normal market oscillation that is often caused by seasonal profit taking,” he said.
He added that regulatory oversight has also improved, boosting investor trust in the system. “Regulation has also improved significantly, enhancing investor confidence.”
Providing a global comparison, Adedipe noted that major international indices like the S&P 500, Dow Jones, and Indian markets have underperformed in stark contrast to Nigeria.
“The best-performing global stock market was Europe (Euro Stoxx 50) with 11.9 per cent — India, the S&P 500 and the Dow Jones all came in negative with -3.6 per cent, -3.5 per cent and -2.3 per cent, respectively, every one of them in response to the Trump tariffs disruptions,” he explained.
Meanwhile, Nigerian stocks have remained in the green, surpassing Ghana (25.9 per cent), South Africa (7.2 per cent), and Kenya (5.5 per cent) with a 6.76 per cent gain so far in the second quarter of 2025.
“As stated earlier, so far in Q2’ 2025, the Nigerian bourse has done 6.76 per cent. As such, under the Tinubu administration, the capital market has performed creditably well,” he concluded.
