After 16.57% H1 Gain, Analysts Expect Stronger Momentum In H2

After delivering a strong performance in the first half (H1) of the year, analysts are expecting the Nigerian stock market to maintain its strong momentum in the second half (H2), driven by improved macroeconomic sentiment, favorable market conditions, and increased investor interest.

The Nigerian stock market delivered a robust performance in H1 of 2025, with the Nigerian Exchange Limited (NGX) All-Share Index (NGX ASI) rising by 16.57 per cent year-to-date, closing at 119,978.57 points from an opening of 102,926.40 points.

This growth translated into a market capitalisation increase of N13.2 trillion, from N62.763 trillion at the start of the year to N75.962 trillion by late June. Analysts now anticipate that this strong momentum will continue into H2 of 2025, driven by a mix of improved macroeconomic fundamentals, corporate earnings, and policy developments.

They expect the H2 performance to depend largely on the Central Bank’s policy trajectory, clarity on banking recapitalisation efforts, inflation trends, and global commodity price movements, while investors remain focused on dividend declarations and the H1 2025 earnings season to shape market sentiment.

The stock market delivered a strong performance in the first half of 2025, closing at 119,978.57 points, representing a year-to-date gain of 16.57 per cent from its opening level of 102,926.40 points. Similarly, the market capitalisation gained N13.2 trillion from N62.763 trillion at the beginning of the year to close at N75.962 trillion at the end of June 27, 2025.

On market performance for H2, analysts at Cardinalstone in its report titled ‘2025 Mid-Year Economic Outlook’ said, “improved macroeconomic sentiment, driven by faster-than-expected GDP growth, a downward trend in inflation, and early signs of currency stability, has set the stage for renewed investor confidence.

“Foreign Portfolio Investors (FPI) participation is also picking up, buoyed by greater FX clarity and improved capital repatriation mechanisms and the recent M&A activities in the oil and gas sector signal stronger corporate earnings ahead, particularly in the upstream and services segments. These drivers reinforce our constructive stance on Nigerian equities going into the second half of the year.”

They also noted that the CBN’s concerted efforts to restore confidence in the FX market, through increased transparency, liberalised pricing mechanisms, and enhanced investor engagement are beginning to yield tangible results.

“In H1 2025, foreign portfolio inflows into the equities market significantly improved, reflecting a clear turnaround in sentiment. We expect this renewed momentum in FPI activities to continue, supported by Nigeria’s relatively strong macro narrative and favourable positioning in the current global environment.”

Cardinalstone projected 2025 equities return of the Nigerian market to 32.2 per cent, saying on a risk-adjusted basis, the market should return 14.5 per cent or an expected return per risk of 1.82x in 2025.

Afrinvest Limited 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 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.”

The chief operating officer of InvestData Consulting Limited,  Ambrose Omordion said, “we expect mixed sentiments on bargain hunting and sector rotation, as traders wait to confirm direction after Doji chart pattern formation. Investors buy into value as they digest dividend payout  of March year end and others in the midst of portfolio reshuffling, even as few audited accounts are expected to hit the market with dividend announcement.”

He added that “sector rotation and portfolio rebalancing continued in the market with investors taking advantage of price correction to buy into value. This is amid the volatility and pullbacks that add more strength to upside potential. Consequently, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.”