Consumer goods and banking stocks have been highlighted as drivers of opportunities in the Nigerian capital market.
This projection was made by the Head of Equities and Alternative Solutions at First Asset Management, Laura Fisayo-Kolawole, at the Nigeria Economic Outlook 2026, organised recently by FirstBank under the title, ‘The Great Recalibration: Mastering Resilience in an Era of Asynchronous Growth.’
Sunday PUNCH reports that as of December 31, 2025, the NGX All-Share Index closed at 155,613.03 points, compared to 102,926.40 points at the end of 2024. On a year-to-date basis, the index returned 51.19 per cent in 2025, compared to 37.65 per cent in 2024. Sectoral performance indicated that NGX Consumer Goods recorded +129.6 per cent, NGX Insurance +65.5 per cent, NGX Industrial Goods +58.9 per cent, and NGX Banking +39.8 per cent.
On sectoral opportunities, Fisayo-Kolawole identified banking, industrial goods, and consumer staples as key areas of focus. “From a sector perspective, we highlight three sectors in particular: banking, industrial goods, and consumer goods, as areas where investors should be paying close attention.
“The banking sector stands to benefit directly from the macroeconomic recovery, with one of the positive developments being the strong capital positions across banks. This capital should ideally be channelled into loan growth, which would support net interest income.
“Many banks also exhibit strong returns on equity and effective cost management, and we expect earnings momentum in the banking sector to continue into 2026,” she maintained.
Kolawole described industrial goods, particularly cement, as another compelling opportunity. “We also favour the industrial goods sector, particularly cement producers, because the sector continues to benefit from significant undersupply, especially when viewed against Nigeria’s infrastructure deficit.”
She linked sector prospects to broader economic trends. “As purchasing power improves alongside the macro recovery, the industrial goods sector should see additional benefits.”
On consumer staples, Fisayo-Kolawole stressed resilience in demand. “The consumer staples sector supplies essential goods to the economy, and demand has remained resilient across agricultural and broader consumer names. This is another area where we believe earnings momentum will re-emerge, and it is a space we continue to encourage investor interest.”
Fisayo-Kolawole said global economic conditions are increasingly supportive of capital flows into frontier markets, positioning Nigeria favourably. “One of the very first points that was made is that we are seeing a world in which yields are likely declining, at least from a broad perspective, and as a result, capital will increasingly look to flow toward frontier markets.
“This is part of the backdrop in which Nigeria is currently positioned, and it is a backdrop that supports the country’s relevance as capital searches for yield and value. There is a clear macroeconomic recovery taking place, and that recovery implies that as capital is looking for a home, a country like Nigeria is beginning to look increasingly attractive as a destination for investment,” she said.
Kolawole highlighted inflation moderation as a critical driver of improving sentiment. “Inflation was around 34.9 per cent in December 2024, and the most recent reading places it at about 14.4 per cent. That decline in inflation points to improving purchasing power for consumers, stronger business confidence, and a much more supportive macro backdrop.”
According to her, these conditions underpin expectations for sustained equity market recovery. “This is the environment we are considering for the year ahead, and it underpins our expectation that the broad recovery in Nigerian equities will continue.”
Addressing concerns around recent strong market performance, Kolawole acknowledged the scale of past returns but maintained a positive outlook.
She said, “It is understandable that some sceptics would say Nigerian equities have already performed very well over the past three years, and they would not be wrong. Equities rose by roughly 45 per cent in 2023, about 37 per cent in 2024, and approximately 51 per cent last year. These are very strong nominal returns.
“Despite the strong nominal performance already recorded, underlying earnings remain very strong, and that is a key reason why we remain constructive on equities.”
On valuation, she noted Nigeria’s relative attractiveness compared to regional peers. Fisayo-Kolawole asserted, “When you look at Nigeria’s price-to-earnings ratios, Nigerian equities are trading at relative discounts compared to African peers. The NGX is trading at around 6.1 times, compared with about 7.7 times for Ghana, around 7 times for Kenya, and about 8.7 times for Egypt.
“As foreign investors search for opportunities across the African continent, Nigeria should feature prominently as a market offering value.”
Beyond equities, Fisayo-Kolawole identified infrastructure and private credit as underappreciated investment areas. “Infrastructure investing and private credit stand out as spaces that are underappreciated or misunderstood, yet they are attracting increasing investor interest, and we expect this trend to continue through 2025 and into 2026.
“Well-structured infrastructure and private credit transactions typically come with strong security packages, robust cash flow waterfalls and reserve accounts, which enhance cash flow visibility and investor protection.”
Fisayo-Kolawole concluded by urging investors to take a broader portfolio view, saying, “As investors assess their portfolios across fixed income and traditional equities, alternative assets such as infrastructure and real estate should not be overlooked as part of the outlook for 2026.”
