LAGOS – Nigeria's stock market has emerged as the world's best-performing equity market in United States dollar terms, recording a 67 per cent return as of July 10, 2026, according to the Nigerian Exchange Group (NGX Group).
In a statement released by the Global PR Executive of EBC Financial Group, Saiful Shamsudin, the firm said that although Nigeria's stock market recorded the world's highest dollar-denominated returns, sustained foreign investment may still depend on favourable index decisions, efficient payment systems and stable interest rates.
The performance, highlighted in a statement by EBC Financial Group, places the Nigerian market ahead of 91 other stock exchanges globally. The gains were driven by rising share prices and a four per cent appreciation of the naira, boosting returns for international investors.
Despite the impressive performance, EBC Financial Group cautioned that the rally may not immediately translate into sustained foreign investment due to regulatory and market factors.
Senior Market Analyst at EBC Financial Group, David Precious, said global index-linked funds are likely to delay investments until Nigeria's planned reclassification to Frontier Market status is confirmed.
He explained that FTSE Russell, which had earlier scheduled Nigeria's move from "Unclassified" to "Frontier" status for September 21, has since placed the decision under review, prompting many institutional investors to remain on the sidelines.
According to him, another global index provider, S&P Dow Jones Indices, has also placed Nigeria on its 2027 watchlist for possible Frontier Market classification, citing the need for consistent policy implementation and reliable market operations.
The statement also noted that the Securities and Exchange Commission's introduction of a one-business-day (T+1) settlement cycle from June 1 may present additional challenges for foreign investors by shortening the time available to convert foreign currency into naira before completing transactions.
Precious said the tighter settlement timeline could encourage some investors to maintain naira balances in advance or reduce the size of their investments to minimise exchange-rate risks.
The report further observed that Nigeria's high interest rate environment may continue to divert investment towards government securities such as Treasury Bills and bonds, which currently offer attractive returns with lower risk compared to equities.
It added that while lower interest rates could reduce borrowing costs for businesses and support corporate growth, premature rate cuts could weaken the naira and reduce returns for foreign investors.
EBC Financial Group also noted that although Nigeria's foreign reserves have strengthened, the bulk of recent foreign investment has flowed into financial assets rather than long-term productive sectors, making capital inflows more susceptible to market changes.
The financial services firm stressed that while Nigeria's stock market performance has attracted global attention, long-term foreign investment will ultimately depend on improved market confidence, stable economic policies, efficient settlement systems and favourable decisions by international index providers.
It added that sustained foreign participation would be essential for companies seeking to raise fresh capital for expansion, job creation and business growth.