Analysts Project 30% NGX Growth in H2 2025 on Banking Reforms and Investor Optimism

Analysts at Cowry Asset Management have forecast a 30 per cent surge in the Nigerian stock market for the second half of 2025. Their projection is anchored on several positive macroeconomic indicators, including banking sector recapitalisation, ongoing investor confidence, and expected equity injections. These dynamics are expected to deepen market liquidity and attract broader participation across the Nigerian Exchange (NGX).

The NGX has already recorded a strong performance in the first half of the year, returning 27.84 per cent year-to-date. The all-share index rose significantly from 102,926.4 points in January to 131,587.25 points by mid-July. Analysts attribute this momentum to improved macroeconomic stability, increased domestic investor activity, and strong earnings from key sectors like banking, cement, and telecommunications.

A potential reduction in interest rates, should inflation continue to ease, is seen as another bullish signal for the equities market. Cowry analysts anticipate monetary policy easing by the Central Bank of Nigeria (CBN) in Q3, which could boost investor appetite for stocks over fixed-income instruments. Moreover, the expected listing of large private and state-owned enterprises could deepen market capitalisation and valuation.

Foreign investor confidence appears to be rebounding, aided by better foreign exchange management and a relatively stable naira. By the end of June, market capitalisation rose from ₦62.76 trillion to ₦75.96 trillion, reflecting a ₦13.2 trillion gain in just six months. This performance suggests growing interest from both institutional and high-net-worth investors.

Similarly, Afrinvest Limited has maintained a bullish 30.4 per cent full-year growth projection for the NGX under its base-case scenario. Their analysis echoes Cowry’s, citing ongoing capital raises in the banking sector, fiscal policy reforms, improved FX stability, and possible corporate listings as key growth enablers. Both firms agree that the current trajectory places the NGX on course for one of its strongest annual returns in recent years, barring any major economic shocks.

Source: The guardian