Nigeria’s return to the FTSE Russell Frontier Market Index is expected to increase foreign investor participation in Nigerian equities and strengthen buying interest in selected stocks, investment analysts have said.
The analysts said the reclassification, which follows the earlier suspension of Nigeria’s inclusion over concerns surrounding T+1 settlement and the pre-funding requirements for foreign portfolio investors, should improve sentiment towards the Nigerian equities market.
The new FTSE Russell list comprises 31 Nigerian stocks classified across large-, mid- and small-cap categories. The large-cap stocks include Aradel Holdings, Dangote, First HoldCo, Geregu Power, MTN Nigeria, Nestlé Nigeria, Nigerian Breweries, Presco, Stanbic IBTC Holdings and Zenith Bank.
Speaking during a market discussion, Oyinka Sola, founder of The Analyst Brief, said the reclassification should attract additional foreign capital into Nigerian equities.
“This is something that we’ve been anticipating,” Sola said, noting that investors had been concerned when FTSE Russell suspended the reclassification because of issues surrounding T+1 settlement and foreign portfolio investors pre-funding their transactions.
“What that means for us is that all these stocks that they have listed out, the T+1 stocks, what we’re expecting is we should see some increased investors’ optimism and buying interest surrounding those stocks and overall in the whole Nigerian equities market,” she said.
Sola said the development could reverse some of the decline in foreign participation in the Nigerian stock market, which she estimated had averaged about 17% over the past five years.
Analysts also expect corporate earnings announcements to support the market through the remainder of 2026, with investors positioning in anticipation of companies reporting stronger financial performances.
Analysts see 4% GDP Growth as Achievable
Nigeria’s economy grew by 4.43% year-on-year in the second quarter, following 3.89% growth in the first quarter with the average growth rate for the first two quarters put at approximately 4.16%, making full-year growth of 4% achievable.
Despite the stronger GDP figures, analysts warned that Nigeria’s growth remains excessively dependent on services while manufacturing continues to underperform.
The analysts’ outlook suggests that Nigeria enters the final months of 2026 with several potential catalysts for financial markets—including the FTSE Russell reclassification, corporate earnings, stronger foreign participation, the refinery IPO and relative naira stability—although election uncertainty, oil receipts and weak manufacturing remain significant risks.SEO assets:
