The Nigerian stock market, which recently took the top spot in the pecking order of the world’s best-performing equity markets, is riding a boom fuelled by increasingly positive investor sentiment, coming mainly from local investors, who have been flocking to the market, and have never tested the waters.
So forceful has the bonanza been that it is turbocharging the share prices of stocks with fundamentals and those without them alike, in several cases to heights never before seen.
It was thanks to that optimism in Nigerian stocks that the benchmark index of the country’s equity market hit its all-time pinnacle in August, when year-to-date yield reached 59.7%, pushing market capitalisation to $117.5 billion.
In the banking sector, big-cap equities, like First HoldCo, Zenith and Ecobank Transnational Incorporated, stand out in terms of their year-to-date yields, which stood at 169%, 93.2%, and 66.5% in that order as of August 26.
First HoldCo, the only one of the three to have released its half-year financial results, reported an annual net profit growth rate of 85.4% for the six months to June. It emerged in recent weeks as Nigeria’s most capitalised stock with a valuation of N5.87 trillion as of August 26.
Demand pressure in the stock has been driven by its top shareholder and billionaire tycoon Femi Otedola, who has splurged millions of dollars this year to increase his stake in the company.
Generally, the valuation of bank stocks, which have yielded 63.2% since January, has accelerated sharply on the back of the positive market sentiment created by a recently concluded recapitalisation, which raised N4.7 billion ($3.5 billion) from local and international investors.
What is driving demand?
One of the reasons why stock prices may jump faster than valuation is when ‘a major investor is acquiring more shares, which could signal to the broader market that there could be something in store for the company’, Abeeblahi Rufai, senior analyst (research and strategy) at Lagos-based multi-asset investment management firm CardinalStone, told International Finance.
That was the case with First HoldCo, where Otedola, who has a huge social media following and is seen by many as a charismatic investment role model, has been buying shares since 2021, when he became the top shareholder.
In the oil & gas sector, Aradel Holdings, part of the consortium that acquired Shell onshore operations in 2025, has been the top-performing stock this year, yielding 105%. In comparison, its half-year net profit grew by 30% above the level seen a year ago.
The major spur, analysts said, is the optimism that soaring oil prices from the US-Israel war against Iran is generating among investors, making the yield on energy stocks, at 85.6%, the highest of the five sector indexes tracked by the NGX.
“What has propelled prices within that space is the global oil price shock because of the war between the US and Iran,” Benedict Egwuchukwu, investment research associate at Afrinvest West Africa told International Finance. “That is affecting how people are seeing the oil and gas sector within Nigeria because there is a lot of profit to be made from this.”
In the cement sub-sector, an acute housing deficit and an infrastructure shortage in Nigeria, Africa’s biggest country by population, are stoking a construction boom that is driving up the demand for cement.
That has led to spikes in cement prices, which, in turn, have boosted interest in cement stocks.
HBM Nigeria, the local unit of Chinese-based Huaxin Cement, is the biggest gainer this year at 148% as of August 26. Its half-year net profit growth rate of 57% significantly trails that.
Sector giant Dangote Cement, owned by Africa’s richest man Aliko Dangote, reported a 22% jump in after-tax profit at half year. The stock, one of the most capitalised on the exchange at N17.4 trillion (nearly $13 billion), has yielded 69.8% this year.
BUA Cement, majority owned by Abdulsamad Rabiu, Africa’s third richest man according to Forbes Billionaire Ranking, posted a modest 12.4% jump in post-tax profit in the six months to June, compared to a year ago. Its market value, however, has enlarged by 77% this year as of August 2026.
Speculative excess?
Beyond these favourable industry factors, other catalysts, notably speculative excess, are also making stock valuations advance at a swifter pace than profits.
Nigeria has a bandwagon culture when it comes to the flavour of the moment in business and investment securities as though a gravitational or supernatural force no one can resist is pulling everybody in one direction, sometimes prompting newbie investors to ignore caution. The boom owes its debt in part to that.
Intervention by authorities
Recognising the harm that could do, the Securities and Exchange Commission stepped in this June to bar the promotion and marketing of a yet-to-be-approved IPO of Dangote Refinery, the world’s biggest single-train oil refinery owned by Dangote.
The frenzy around the $5 billion public share sale, touted as Africa’s largest-ever IPO and now slated for October, was so huge that people that knew next to nothing about equity investment were reported to be opening trading accounts with brokers ahead of key regulatory approvals.
The SEC’s intervention was timely, given that a similar flurry of interest in Nigerian stocks birthed a bubble before equities tanked eighteen years ago, making Nigeria one of the markets worst hit by the 2008 global financial crisis.
Power of optimism
That massive optimism from retail local investors is stoking a prolonged market-wide rally across all sectors of the stocks listed on the Nigerian Exchange (NGX).
It mirrors how domestic participation has steadily grown to be the pivot of all the major surges the market has recorded since 2021, when international investors, who until then were the driving force, exited the country in droves after pandemic lockdowns spurred a far-reaching dollar squeeze.
Latest market data shows foreign participation in equity trading stood at 5.6%.
That was way weaker than pre-pandemic levels. The figure for September 2019, for instance, three months before the pandemic broke out, was as high as 66.8%.
Such factors have broadly lifted most companies’ valuations this year, a number of which have accelerated at a far more rapid pace than their net profits. Curiously, loss-making firms feature among stocks that are the best performers since the start of the year.
Obscure Companies Lead Nigeria’s World-Beating Rally
Seven little-known companies emerged in August as the best-performing stocks year to date on the 147-company strong bourse.
All but one are penny stocks – a class of stocks that have been noted by analysts as particularly susceptible to share price manipulation – which has necessitated an urgency for regulators and watchdogs to subject trading in such equities to rigorous surveillance and scrutiny.
Penny stocks ‘are easily manipulated because of their volatility and exposure to speculators’, Rufai told International Finance.
“Manipulating penny stocks, too, could probably not bring as much attention or scrutiny as blue-chip stocks, as they’re not held by a lot of investors. Hence, it could easily go under the radar, making it easier to manipulate,” he added.
The entry of Zichis Agro Allied Industries, the second biggest gainer this year, into the market is a case in point. Its market capitalisation, which was N1.1 billion ($765,511) at listing, had ballooned to N10.1 billion ($7.2 million) barely a month after.
The company, which is involved in oil palm, poultry and fish farming as well as animal feed production and crop cultivation, posted an 859.1% gain in less than five weeks after its listing on the NGX, prompting analysts and the SEC to raise eyebrows.
In the last week of February, the regulator suspended trading in the stock and opened an investigation into its market activities.
Olufemi Shobanjo, head of the regulation arm of the NGX, said at the time, “Our primary responsibility is to maintain a level playing field where market participants can trade with confidence, backed by timely and accurate information.
“This advisory is a routine communication, reinforcing that sound fundamentals, not speculation, remain the foundation for sustainable investment outcomes.”
Muktar Mohammed, finance analyst and non-executive director at Lagos-based Blue Marina Securities, told local TV News Central that a dramatic upward price trajectory in so short a time is unprecedented.
“It has never happened in the history of the exchange to see a stock gain 772%” just one month from its listing, he said.
“When we talk about listing by introduction, there is a certain flow that you will make available for the public. And what we’ve seen over and over is that some of this flow is not made available. Then the demand is high, the supply is low. Definitely the price will go up.”
He was alluding to the NGX’s free float rule, which requires the investors who are insiders to hold at least a certain percentage of a company’s stock, 15% in the case of Zichis.
Its most recent financial report covering the first half of this year showed post-tax profit quickened by 502% to N457 million from a year ago. That compares to its valuation, which, as of August 25, had been up by 754% since listing.
In a market bulletin issued in March, the NGX stated that it ‘has concluded its investigation into the trading activities in the company’s shares and has implemented corrective measures to safeguard market integrity’.
Fortis Global Insurance (formerly Standard Alliance Insurance), which has been technically insolvent for more than five years as its liabilities have consistently outstripped liabilities, is miraculously this year’s top performer.
Since the first quarter of 2025, the insurer has been heaping up losses, with loss after tax for the half-year 2026 standing at N2.6 billion, 158.3% higher than a year ago.
Yet, it has gained 925% this year, outperforming the market by more than sixteen times.
Until January, the underwriter had been under a trading suspension on account of its failure to publish its corporate accounts for years.
Between August 2021 and April 2025, Fortis Global Insurance did not publish the reports until it started doing so on April 11, 2025.
In the first week after trading resumption, it gained 65%.
Fortis Global owed its overnight share price turnaround in part to a share consolidation it executed in July.
The 1-for-4 share consolidation was a major contributor to the spell of strong gains it recorded between July and August as the move cut back its outstanding shares by 75%.
The market capitalisation automatically surged by 260.6%, reflecting the boost that the prices of stock typically receive from such share reduction.
But the major driver of its sharply higher valuation has been the impact of buy pressure on its share price ever since the consolidation, with the availability of its tradable shares now far lower than before, consequently boosting its share price.
SCOA Nigeria, a low-liquidity stock, is the third best performer, having added 365% from the start of the year to August 26. Meanwhile, profit after tax tumbled 54.7% to N147.9 million in the first half of the year.
The company, which is involved in the sales, maintenance and leasing of vehicles, is a subsidiary of Paris-based investment holding company SCOA International S.A.
Until July 1, 2025, Lebanese-American Massad Fares Boulos was the MD of SCOA Nigeria. At present, Massad Fares Boulos is a senior advisor to US President Donald Trump on Arab and African affairs.
SCOA Nigeria is majority-owned by Michel Zouhair Fadoul, who, according to the New York Times, is the father of Boulos’s wife, Sarah. Interestingly, their son Michael is married to Tiffany, Trump’s daughter.
SCOA Nigeria has been reticent about its corporate activities and key decisions. No corporate disclosure document about the firm is available for the whole of 2015, 2016, 2019 and 2023 on the NGX, leaving the market and potential investors in the dark at the best of times.
Only one of such documents has been released this year, just two throughout 2025, one in 2024, one in 2022, two in 2021, and one in 2020.
The company didn’t hold its annual general meeting for six years in a row (2019-2024), all under Boulos’s leadership. It secured a court order to do so in September 2025, two months after Boulos exited the company.