Lagos | July 30, 2025
Despite a bullish run in the Nigerian equities market, many institutional fund managers are notably holding back from participating in the ongoing rally, citing concerns over macroeconomic uncertainty and valuation risks.
The Nigerian Exchange (NGX) has recorded impressive gains in recent months, driven by renewed investor confidence, improved corporate earnings, and policy signals from the federal government aimed at revitalizing the economy. Yet, even as the All-Share Index climbs, some of the country’s top fund managers are treading with caution.
Analysts say the market has been buoyed largely by retail investors, speculative trading, and a handful of foreign inflows chasing quick returns. However, professional asset managers appear wary, citing lingering inflation, interest rate volatility, and currency instability as key deterrents.
“There’s too much policy noise and not enough clarity,” one fund manager said on condition of anonymity. “Until we see more fiscal consistency and confidence in naira stability, we’re not rushing into equities despite the market’s momentum.”
Market data shows that sectors such as banking, telecoms, and fast-moving consumer goods have led the rally, with some stocks posting double-digit returns in just weeks. Nonetheless, institutional portfolios remain underweight on equities, preferring safer instruments like fixed-income securities.
This divergence between retail enthusiasm and professional restraint is raising questions about the sustainability of the current rally. Some market watchers warn that without deeper institutional participation, the market could be vulnerable to sudden corrections.
Yet others argue that the cautious approach of fund managers may shift if macroeconomic indicators improve and government reforms begin to yield tangible results.
As it stands, Nigeria’s stock market continues to boom, but the absence of large-scale institutional backing underscores the fragile confidence in the broader economic outlook — a gap that may define the market’s trajectory in the months ahead.