Investors should avoid speculative decisions, focus on informed investing – Adenagbe
- +How would you assess the current performance of the Nigerian capital market?
- +What is your outlook for the market in the new quarter?
- +What are the key drivers of share prices on the NGX?
- +What advice would you give investors during this earnings season?
- +How important is investor education in the growth of the capital market?
- +What role can the capital market play in wealth creation for Nigerian youths?
- +Do you believe foreign investor confidence in Nigeria is improving?
- +What challenges could affect market performance in the coming quarter?
Sehinde Adenagbe is the chairman of the Association of Securities Dealing Houses of Nigeria (ASHON). As a strong advocate of transparency, integrity, and ethical conduct by operators, Adenagbe who is also a fellow of the Chartered Institute of Stockbrokers (CIS) speaks on the current performance of the market, its outlook and other related issues, writes Iheanyi Nwachukwu. Excerpts
Sehinde Adenagbe is the chairman of the Association of Securities Dealing Houses of Nigeria (ASHON).
How would you assess the current performance of the Nigerian capital market?
The Nigerian capital market has shown remarkable resilience and growth despite global economic uncertainties. The Nigerian Exchange Limited (NGX) has continued to attract positive attention from international rating agencies, reflecting growing confidence in the market’s structure, transparency, and regulatory framework. We are also witnessing stronger domestic participation, which is a healthy sign for market stability and long-term growth.
What factors are driving the renewed participation of local investors in the market?
Several factors are responsible for the increasing participation of indigenous investors. First is improved awareness about investment opportunities in the capital market. Second, the search for better returns amid inflation has pushed many Nigerians toward equities and other financial instruments. In addition, advances in digital trading platforms have made investing more accessible, especially for younger investors. Another attraction is the fast and easy convertibility of market instruments to cash as opposed to other markets.
What is your outlook for the market in the new quarter?
The outlook remains cautiously optimistic. We expect continued investor interest, especially as companies release audited financial statements and dividend declarations. Sectors such as banking, telecommunications, consumer goods, and energy are likely to remain attractive. However, investors will continue to monitor macroeconomic indicators such as inflation, interest rates, exchange rate stability, and government policy direction.
Why are banking stocks receiving significant attention from stockbrokers and analysts this season?
Banks remain critical drivers of market capitalisation and liquidity on the NGX. With the release of audited financial statements, investors are carefully examining the quality of earnings, asset strength, loan performance, and capital adequacy of banks. The ongoing recapitalization discussions and regulatory reforms are also making the sector particularly important to market participants. Investors are also watching closely the implications of the new directive to banks on dividend payment by the Central Bank of Nigeria (CBN) The shareholders will be more rewarded at the long run as the banks’ balance sheets become healthier, bigger and stronger
What are the key drivers of share prices on the NGX?
Share prices are influenced by several factors. These include corporate earnings performance, dividend history, macroeconomic conditions, inflation trends, interest rates, exchange rate movements, investor sentiment, timely financial communication, government policies and political dictates. Demand and supply dynamics in the market also play a significant role. Ultimately, companies with strong fundamentals and good corporate governance tend to attract sustained investor confidence.
What advice would you give investors during this earnings season?
Investors should avoid speculative decisions and focus on informed investing. This is the time to review portfolio allocations carefully, study company fundamentals, and seek professional investment advice from certified stockbrokers where necessary. Diversification remains very important, especially in a volatile economic environment. Investors should also pay attention to long-term value rather than short-term market movements. Set your investment goals and priorities and do not be greedy trying to always expect the best of the market.
How important is investor education in the growth of the capital market?
Investor education is quite important. A well-informed investor base contributes to market stability, confidence and eventual growth of the market. ASHON, Chartered Institute of Stockbrokers (CIS), SEC, NGX Academy and many other institutions are in the vanguard of making more Nigerians understand the working of the capital market in order to enjoy the opportunities available within it. ASHON and others stakeholders are really committed to improving financial literacy through seminars, digital campaigns, market outreach, and collaboration with educational institutions.
What role can the capital market play in wealth creation for Nigerian youths?
The capital market offers young Nigerians a legitimate and sustainable path to wealth creation. Through disciplined investing in equities, mutual funds, exchange-traded funds, and bonds, youths can build long-term financial security. Beyond investing, the market also creates career opportunities in finance, technology, research, compliance, and investment advisory services. The capital market is reshaping the lives of the young Nigerians by discouraging them from investing in Ponzi schemes.
New financial products such as blockchain-based assets are gaining attention globally. How should Nigeria respond?
Innovation is inevitable in global finance, and Nigeria must position itself strategically. Blockchain technology presents opportunities for transparency, efficiency, and financial inclusion. However, innovation must be supported by strong regulation, investor protection, and market education. The objective should be to encourage responsible innovation while minimizing systemic risks and fraudulent activities. The ISA Act 2025 gives due recognition to virtual assets and digital tokens as securities under which blockchain-based asset stands. There is strict regulation by SEC to oversee the management of this product in order to forestall any violation.
Do you believe foreign investor confidence in Nigeria is improving?
Yes, there are encouraging signs of improving confidence. Positive assessments by international agencies and reforms within the financial markets are helping to strengthen Nigeria’s investment image. Recently Nigeria was upgraded to Frontier Market Status on FTSE Russell. This is an affirmation that confidence is being restored to the Nigerian capital market. However, sustained confidence will depend on macroeconomic stability, policy consistency, foreign exchange liquidity, and the ease of doing business.
What challenges could affect market performance in the coming quarter?
