Nigerian equities gain N1.7trn after FTSE Russell upgrades Nigeria to Frontier Market status
By Aboki Forex —
Nigerian equities snapped an 11-day losing streak with net capital gains of N1.69 trillion after global index provider FTSE Russell confirmed Nigeria's reclassification from "Unclassified" to "Frontier Market Status". The upgrade takes effect from the start of trading on September 21, 2026.
The All Share Index (ASI) closed the weekend at 241,298.47 points, rebounding from a recent low of 238,682.92 points hit on Wednesday. Aggregate market value of all quoted equities rose from N154.137 trillion on Thursday to N155.826 trillion at the weekend, representing net capital gains of N1.689 trillion.
Rally details
Net capital gains since Thursday's announcement stood at N1.689 trillion. Average gain for the period was 1.1 per cent, lifting the year-to-date return to 55.06 per cent. The upgrade rally also offset losses from the previous three trading sessions, closing the week with an average gain of 0.81 per cent.
Cordros Capital said at the weekend: "Next week, we expect positive sentiment towards risk assets to persist, following FTSE Russell's confirmation that Nigeria remains on track for reinclusion in the Frontier Market Index. Nonetheless, elevated fixed-income yields may continue to compete for investors' capital and temper the pace of gains."
Why the upgrade happened
The confirmation followed extensive reviews of Nigeria's foreign exchange, liquidity, capital repatriation and macroeconomic environment. FTSE Russell's Index Governance Board acted on favourable reports from its Equity Country Classification Advisory Committee, which found "no material settlement, operational or funding issues" around the Nigerian market, even with the shift from a three-day T+2 transaction cycle to a two-day T+1 settlement cycle.
Nigeria moved to the T+1 settlement cycle on June 1, 2026. The country had been downgraded to "Unclassified" status in 2023 amid forex liquidity problems, capital repatriation challenges, depleted reserves, overdue forex obligations, low national revenues and a spiralling black market.
President Bola Ahmed Tinubu's administration unified forex rates under a market-determined framework, removed petrol subsidy and implemented other reforms that redirected the country's macroeconomic outlook.
Market leaders react
Group Managing Director of Nigerian Exchange Group, Mr Temi Popoola, called the upgrade "an important moment for Nigeria's capital market". He said the return to Frontier Market status creates an opportunity for the next phase of development.
"We have to turn greater international visibility into broader participation, deeper liquidity and more capital for Nigerian businesses. Our ambition is to build a market that is increasingly competitive globally and more relevant to Nigeria's economic growth," Popoola said.
He also noted that the FTSE Frontier Index Series annual indicative review files for September 2026 will reflect Nigeria's reclassification. The upgrade follows S&P Dow Jones Indices placing Nigeria on its Watch List for potential reclassification to Frontier Market status as part of its 2027 annual review.
President of the Chartered Institute of Stockbrokers, Dr Fiona Ahimie, said the upgrade should positively affect foreign portfolio investment by restoring Nigeria's visibility and eligibility within the FTSE Russell global index framework. She said index-tracking funds can now consider Nigerian stocks within their investment universe.
"For the domestic market, the more meaningful benefits could emerge gradually through improved liquidity, broader investor participation and stronger valuations," Ahimie said. "Increased foreign participation could boost trading activity and potentially reduce the valuation discount attached to Nigerian equities, especially large and liquid stocks."
What it means
For the naira and Nigerian businesses, the reclassification could improve capital inflows and deepen market liquidity over time. But as Cordros Capital warned, high fixed-income yields may still compete for investor funds, so the pace of equity gains could remain uneven.