Analysts at Cordros Securities expect the Nigerian stock market to deliver an additional 11.9% return in the fourth quarter of 2025, adding to the already strong 38.7% gain recorded year-to-date.
In their report titled “Nigerian Equities: Will the Bull Run Persist in Q4-25”, they described the market as one of the best-performing in Africa this year, supported by favorable macroeconomic conditions.
They pointed to sustained disinflation, currency stability, continued monetary easing, and solid corporate earnings as the factors likely to keep investor sentiment strong and push the market beyond its current levels.
At the same time, they warned that the possible introduction of a new capital gains tax (CGT) regime could create some volatility.
Cordros also emphasized that institutional investors will be central in driving market activity, anchoring both liquidity and price momentum through the final quarter of the year.
Institutional anchor
The analysts highlighted the resilience of domestic institutional investors in supporting the Nigerian equities market.
They noted that net institutional inflows reached N213.3 billion year-to-date as of July 2025, significantly higher than the N139.9 billion recorded in the same period of 2024.
This strong institutional presence, they explained, helped to sustain the market even in the face of net retail outflows of N25.98 billion and foreign investor outflows amounting to N61.8 billion.
Placing this trend in context, the analysts remarked: “As observed in previous years, institutional participation tends to strengthen in the final quarter as portfolio managers position ahead of year-end reporting and dividend cycles.”
They added that the inflows reflect falling fixed-income yields, strong corporate earnings, and attractive equity valuations, all of which keep pulling institutional investors deeper into the market.
Valuations
According to the analysts, the Nigerian stock market is currently trading at a price-to-earnings ratio of 7.3x, well below its five-year historical average of 10.7x.
In comparison, other frontier markets such as Kenya (7.5x), Vietnam (16.1x), and Morocco (19.7x) trade at higher multiples, reflecting how cheap and attractive Nigerian equities remain.
Cordros emphasized this point, noting: “Despite five consecutive years of gains, Nigerian equities remain inexpensive on both an absolute and relative basis.”
- They revealed that market-wide earnings per share in Nigeria has grown 72.8% year-to-date, rising to N15,988.04 from N9,253.83 in 2024.
- Looking ahead, they project that the market will close 2025 with an earning per share of N20,701.64, representing a 123.7% year-on-year increase compared to FY 2024.
Even with such strong earnings momentum, the analysts stated that the market’s P/E ratio is only expected to edge up slightly to 7.5x, still well below the historical average.
This, they stated, further highlights just how inexpensive the Nigerian stock market remains despite its impressive run.
