Consumer goods and banking stocks have been identified as major drivers of emerging opportunities in the Nigerian capital market amid improving macroeconomic conditions.

The PUNCH reported that this outlook was presented by the Head of Equities and Alternative Solutions at First Asset Management, Laura Fisayo-Kolawole, during the Nigeria Economic Outlook 2026 organised by FirstBank. The event was held under the theme, The Great Recalibration: Mastering Resilience in an Era of Asynchronous Growth.

According to figures earlier reported, the NGX All-Share Index closed at 155,613.03 points as of December 31, 2025, rising from 102,926.40 points recorded at the end of 2024. On a year-to-date basis, the index delivered a return of 51.19 per cent in 2025, compared with 37.65 per cent in 2024. Sectoral performance data showed that NGX Consumer Goods gained 129.6 per cent, NGX Insurance rose by 65.5 per cent, NGX Industrial Goods advanced by 58.9 per cent, while NGX Banking appreciated by 39.8 per cent.

Speaking on sector-specific opportunities, Fisayo-Kolawole identified banking, industrial goods and consumer staples as the most attractive segments of the market. “From a sector perspective, we highlight three sectors in particular: banking, industrial goods, and consumer goods, as areas where investors should be paying close attention.”

She explained that the banking sector is well positioned to benefit from Nigeria’s macroeconomic recovery. “The banking sector stands to benefit directly from the macroeconomic recovery, with one of the positive developments being the strong capital positions across banks. This capital should ideally be channelled into loan growth, which would support net interest income.”

She further noted the sector’s profitability and efficiency metrics, adding, “Many banks also exhibit strong returns on equity and effective cost management, and we expect earnings momentum in the banking sector to continue into 2026.”

Turning to industrial goods, Fisayo-Kolawole described the sector, particularly cement manufacturing, as highly compelling for investors. “We also favour the industrial goods sector, particularly cement producers, because the sector continues to benefit from significant undersupply, especially when viewed against Nigeria’s infrastructure deficit.”

She linked the prospects of the sector to broader economic improvements, saying, “As purchasing power improves alongside the macro recovery, the industrial goods sector should see additional benefits.”

On consumer staples, Fisayo-Kolawole emphasised the resilience of demand despite recent economic pressures. “The consumer staples sector supplies essential goods to the economy, and demand has remained resilient across agricultural and broader consumer names. This is another area where we believe earnings momentum will re-emerge, and it is a space we continue to encourage investor interest.”

She also highlighted global economic trends that are increasingly favourable to frontier markets such as Nigeria. “One of the very first points that was made is that we are seeing a world in which yields are likely declining, at least from a broad perspective, and as a result, capital will increasingly look to flow toward frontier markets.”

According to her, Nigeria is well positioned within this global context. “This is part of the backdrop in which Nigeria is currently positioned, and it is a backdrop that supports the country’s relevance as capital searches for yield and value. There is a clear macroeconomic recovery taking place, and that recovery implies that as capital is looking for a home, a country like Nigeria is beginning to look increasingly attractive as a destination for investment,” she said.

Fisayo-Kolawole identified moderating inflation as a key factor supporting improved investor sentiment and consumer confidence. “Inflation was around 34.9 per cent in December 2024, and the most recent reading places it at about 14.4 per cent. That decline in inflation points to improving purchasing power for consumers, stronger business confidence, and a much more supportive macro backdrop.”

She said these conditions form the basis for expectations of continued recovery in the equities market. “This is the environment we are considering for the year ahead, and it underpins our expectation that the broad recovery in Nigerian equities will continue.”

Addressing concerns about the strong performance of Nigerian equities in recent years, Fisayo-Kolawole acknowledged investor scepticism but remained optimistic. She said, “It is understandable that some sceptics would say Nigerian equities have already performed very well over the past three years, and they would not be wrong. Equities rose by roughly 45 per cent in 2023, about 37 per cent in 2024, and approximately 51 per cent last year. These are very strong nominal returns.”

She maintained that further upside remains supported by fundamentals. “Despite the strong nominal performance already recorded, underlying earnings remain very strong, and that is a key reason why we remain constructive on equities.”

On valuation metrics, she pointed to Nigeria’s relative appeal compared to other African markets. Fisayo-Kolawole asserted, “When you look at Nigeria’s price-to-earnings ratios, Nigerian equities are trading at relative discounts compared to African peers. The NGX is trading at around 6.1 times, compared with about 7.7 times for Ghana, around 7 times for Kenya, and about 8.7 times for Egypt.”

She added that this pricing advantage should attract foreign investors. “As foreign investors search for opportunities across the African continent, Nigeria should feature prominently as a market offering value.”

Beyond listed equities, Fisayo-Kolawole identified infrastructure and private credit as investment areas that deserve more attention. “Infrastructure investing and private credit stand out as spaces that are underappreciated or misunderstood, yet they are attracting increasing investor interest, and we expect this trend to continue through 2025 and into 2026.”

She explained that such investments often provide enhanced protection for investors. “Well-structured infrastructure and private credit transactions typically come with strong security packages, robust cash flow waterfalls and reserve accounts, which enhance cash flow visibility and investor protection.”

She concluded by encouraging investors to adopt a diversified approach to portfolio construction. “As investors assess their portfolios across fixed income and traditional equities, alternative assets such as infrastructure and real estate should not be overlooked as part of the outlook for 2026.”