Analysts at Cowry Asset Management have projected a 30 per cent surge in the Nigerian equities market during the second half (H2) of the year, citing favourable macroeconomic indicators, sectoral momentum and sustained investor appetite as key drivers.

The firm’s outlook highlights faster execution of banking sector recapitalisation as a major catalyst, with capital injections and fresh equity issuances expected to deepen liquidity and stimulate broader market participation.

The projection comes on the back of an already strong year-to-date performance of the Nigerian Exchange (NGX), which has delivered a 27.84 per cent return as of Friday.

The NGX all-share index (ASI) rose from its January opening of 102,926.4 basis points to 131,587.25 points, buoyed by robust earnings, strategic repositioning by domestic investors and improved macroeconomic stability.

According to Cowry’s analysts, optimism remains high across key sectors such as banking, cement and telecommunications, where companies are expected to post solid H2 earnings.

The potential for a downward shift in interest rates, particularly if inflation continues to ease, is also seen as a key trigger that could drive liquidity from fixed income into equities.

In particular, the expectation of monetary easing by the Central Bank of Nigeria (CBN) in Q3 could significantly enhance risk-on sentiment and further energise the bourse.

Another significant factor is the anticipated listing of large corporates and possibly state-owned enterprises on the NGX, which Cowry said would be a game changer for market depth and valuation.

With improved foreign exchange (FX) management, the naira has shown relative stability — an outcome that has helped to restore confidence among offshore investors and institutional players.

Market capitalisation, which stood at N62.76 trillion at the beginning of the year, closed June 30 at N75.96 trillion, gaining N13.2 trillion in six months.

The impressive performance underscores a shift in investor sentiment, with increased demand for equities seen across various high-net-worth and three channels.

Similarly, Afrinvest Limited projected a 30.4 per cent full-year gain for the NGX under its base-case scenario. The firm cited ongoing banking sector capital raises, moderating yields on fixed-income markets, improved FX management and stronger government capital expenditure as key factors expected to sustain market momentum through the end of the year.

Afrinvest analysts noted that the major dynamics shaping the market in the first half, especially strong corporate fundamentals, liquidity injections, and policy reforms, are still intact.

They also pointed out the possibility of strategic corporate listings as another potential boost to investor engagement and market performance.

The analysts said: “Looking ahead in H2, we maintain our market projections as most of the current market dynamics still align with our prognosis at the beginning of the year.

“For full year 2025, we still project a 30.4 per cent gain in our base-case scenario, driven by expectations of sustained pace of banking sector capital raise, fixed-income yield moderation, fiscal policy reforms & accelerated CAPEX spending, improved FX stability, and the possibility of some major corporate listings on the NGX.”

With these conditions aligned, both Cowry Asset and Afrinvest believe the Nigerian equities market is on track to post one of its strongest annual returns in recent years, barring any major macroeconomic disruptions or unexpected policy reversals.