Election fever, Dangote Refinery to drive stock investors’ fortune at year end

By Peter Egwuatu

The Nigerian stock market is projected to cross the N200 trillion market capitalisation by December 2026, while investors’ returns could exceed 57 per cent.

Capital market analysts, who made the projections, said the anticipated listing of shares of Dangote Petroleum Refinery on the Nigerian Exchange Limited (NGX), coupled with improved investor confidence, strong corporate earnings, increased market liquidity and favourable macroeconomic developments, would provide further impetus for the equities market.

They also projected that the NGX All-Share Index (ASI), the market’s major performance indicator, could close the year at about 280,000 points.

However, some analysts have warned that profit-taking, election-related uncertainties and global economic developments could trigger intermittent volatility.

But the analysts agreed that the concern over 2027 general election is around possible policy change adding that if there are no major adverse economic policy developments capable of undermining investor confidence the impact of the election would be less severe.

Market performance so far

A review of the market’s performance Year-to-Date, YtD, as at last week, showed that investors’ wealth had increased by N62.76 trillion, representing a 60.47 per cent appreciation.

Market capitalisation, which measures the total value of listed equities, rose from N99.376 trillion at the beginning of the year to N162.134 trillion last week.

Similarly, the NGX ASI appreciated by 60.5 per cent, rising from 155,613.03 points at the beginning of the year to 249,710.59 points.

The impressive performance has been supported by relative stability in the foreign exchange market, renewed investor confidence, strong corporate earnings, easing inflation, improved liquidity in the financial system and the decision of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) to reduce the Monetary Policy Rate (MPR) to 23 per cent.

Analysts’ projections  

Speaking to Financial Vanguard on his projection for the year-end, Olatunde Amolegbe, immediate past President, Chartered Institute of Stockbrokers (CIS), and Managing Director, Arthur Stevens Asset Management Limited, said he remained cautiously optimistic about the equities market.

He stated: “I remain cautiously optimistic about the Nigerian stock market for the rest of the year. My expectation is that the All-Share Index will deliver a full-year return of approximately 57.65%.

“Although the market has recorded impressive gains so far, I expect some moderation in the coming weeks, as investors may take profits following the significant rally we have witnessed. We could also see some volatility as investors reposition their portfolios ahead of the new year.

“On the positive side, relatively strong corporate earnings, improved investor confidence, increased domestic participation and ongoing economic reforms should continue to provide support for the market. There are still opportunities in fundamentally strong companies, particularly those with sustainable earnings and attractive valuations.

“However, inflationary pressures, high interest rates, exchange-rate uncertainties and global economic developments remain key downside risks.

“In terms of market capitalisation, I expect it to remain elevated, with further growth possible depending on equity price movements and new listings. Overall, I see the market maintaining a positive underlying outlook, although investors should be prepared for some corrections along the way.”

On the performance of the market in the first three quarters of the year, Amolegbe said: “The Nigerian stock market has had a remarkable performance across the first three quarters of 2026.

“The first quarter was particularly impressive, with the All-Share Index gaining approximately 29.35%. This was driven by strong buying interest, improved investor sentiment and a broad repricing of equities.

“In the second quarter, the market gained another 13.98%. Although we experienced some profit-taking and intermittent corrections, the overall market direction remained positive.

“The third quarter also recorded positive performance, with the ASI advancing by approximately 9.50%.

”However, we began to see a more selective market, as investors became increasingly focused on corporate earnings, valuations and the fundamentals of individual companies.

“By the end of September, the market had recorded a year-to-date gain of approximately 61.43%, with market capitalisation standing at about N163.1 trillion.

“The market has remained strong since then, with the ASI recording further gains into November. However, I think it is important to note that after such a significant rally, some consolidation and profit-taking should be expected.”

Commenting on the possible impact of the 2027 general election on the market, he said: “Yes, I believe the 2027 general election will have some influence on market sentiment, particularly as political activities gather momentum.

”However, I do not necessarily expect the election to derail the overall market outlook.

“On the downside, election-related uncertainty could make some investors, particularly foreign portfolio investors, more cautious. We could see temporary capital outflows, increased volatility and profit-taking as investors assess the potential implications of the election for economic policies and the business environment.

“On the positive side, if investors see continuity in economic reforms, policy stability and a credible electoral process, this could help sustain market confidence. Increased economic activity and spending around the election period could also create opportunities in selected sectors.

“Ultimately, I believe the election will be just one of several factors influencing the market. Inflation, interest rates, exchange-rate stability, corporate earnings and the government’s broader economic policy direction will remain equally important.

“My advice to investors is to remain invested but be more selective in their stock choices. Companies with strong fundamentals, sustainable earnings, good corporate governance and attractive valuations are better positioned to withstand market volatility.

“Overall, I remain positive about the long-term prospects of the Nigerian equities market, but I expect a more measured and selective market environment as we approach year-end and the 2027 general elections.”

Dangote Refinery listing may push market cap above N200trn

Also commenting, Sam Onukwue, immediate past Chairman, Association of Stockbroking Houses of Nigeria (ASHON), and Managing Director, Mega Equities Limited, said the completion of the Dangote Refinery IPO would enable the secondary market to regain momentum after investors redirected funds to the primary market.

He stated: “The secondary market for equities was depressed for most part of October 2026 because of migration of financial assets to Dangote Refinery IPO in the primary market.

”With the conclusion of the IPO, the market is expected to normalize in the remaining period of the year up to Q1 2027.

”With the listing of the Dangote Refinery IPO, market capitalization could cross the N200 trillion mark in December 2026.

“Save for negative sentiment usually attendant to General Elections in Nigeria, ASI is expected to close the year at about 280,000 as investors position for end of year distributions.”

On the market’s performance across the first three quarters, Onukwue said: “Equities Market has been extraordinarily bullish in the first three quarters of the year although, majority of the gains occurred in Q1 but momentum dropped in the later part of Q2 while Q3 was only marginal.”

On the impact of the forthcoming general election, he said: “There is no firm data showing consistency in the behaviour of Nigeria’s capital market just before general elections and immediately after. The situation has differed from time to time.

”However, this election cycle is not expected to have any material impact on equities, partly due to the maturity of the investing public and more compelling impact of global events and domestic macroeconomic recovery.”

N210trn market capitalisation target

In his own projection, David Adonri, Managing Director, Highcap Securities Limited, said the listing of Dangote Refinery could push market capitalisation to N210 trillion by December 2026.

He said: “The secondary market for equities was depressed for most part of October 2026 because of migration of financial assets to Dangote Refinery IPO in the primary market. With the conclusion of the IPO, the market is expected to normalize in the remaining period of the year up to Q1 2027.

”With the listing of Dangote Refinery IPO, market capitalization could hit N210 trillion in December 2026.

”Save for negative sentiment usually attendant to general elections in Nigeria, ASI is expected to close the year at about 280,000 as investors position for end of year distributions.

“Equities market has been extraordinarily bullish in the three quarters of the year although, majority of the gains occurred in Q1 but momentum dropped in the later part of Q2 while Q3 was only marginal.”

On the impact of the general election, he said: “There is no firm data showing consistency in the behaviour of Nigeria’s Capital Market just before General Elections and immediately after. The situation has differed from time to time. However, this election cycle is not expected to have any material impact on equities partly due to the maturity of the investing public and more compelling impact of global events and domestic macroeconomic recovery.”

Election unlikely to derail market if there is no negative policy reform — Olayinka 

Also commenting, Tajudeen Olayinka, market analyst and investment banker, said the market was expected to experience its traditional year-end rally, although the anticipated listing of Dangote Refinery could temporarily delay the process.

He stated: “Normally, market should begin to experience the usual buildup to year-end rally by second week in November, but could have some little delay because of the expected listing of Dangote Refinery IPO in this same month of November, which is also expected to create a post listing market wide rally because of the excitement around the IPO, and the fact that several new investors will be testing the market to have a firsthand experience of bull and bear.

”So, we should expect a good year-end return for the market, not below what we currently have, and barring any negative news around the market and the economy. So, the year-end return is positive.”

On the performance of the market in the first nine months of the year, Olayinka said: “First and second quarters were particularly good for the market because of the noticeable high level of liquidity in the market, both from retail and institutional investors, but experienced some sluggish activities towards the end of second quarter due to concerns raised by some institutional investors, local and foreign, relating to the adoption of T+1 settlement cycle by NGX and the SEC. The third quarter had a fair share of the bearish sentiments, even though the market made some attempts to kick-start new rounds of rally that didn’t last or couldn’t be sustained because of the sucking power of liquidity regarding the Dangote Refinery IPO.”

On the impact of the 2027 general election, he said: “The general election shouldn’t really impact the market negatively but the anti-market sentiments from the opposition camps, especially the ongoing campaign around populist reversal of fuel subsidy and non release of sound economic programmes, could slow down activities in the market during the period.

”Quite unlike what we experienced during the run-up to the 2023 presidential election, in which the three leading candidates were identified to be pro-market. The story is different today, and the market is already pricing and repricing risks accordingly.”

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