FSDH Calls for Long-Term Capital to Sustain Nigeria’s Equities Market

FSDH Highlights Role of Banks, Pension Funds in Market Stability

FSDH Merchant Bank has called for increased mobilisation of long-term capital to sustain momentum in Nigeria’s equities market, warning that recent gains will require consistent capital inflows to remain resilient. The call was made at the firm’s inaugural investors’ conference in Lagos.

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Nigeria’s equities market has recorded strong performance in early 2026, driven by renewed investor confidence and increased participation. However, market leaders and regulators are now shifting focus from short-term gains to long-term sustainability.

At the centre of this discussion is the need for stable, patient capital capable of supporting market depth and economic expansion. FSDH Merchant Bank emphasised that without sustained long-term investment particularly from institutional sources such as pension funds, banks, and development finance institutions the current bullish trend may not be durable.

This perspective reflects broader concerns about liquidity, market volatility, and the structural capacity of Nigeria’s capital market to support large-scale economic transformation.

Strong Market Performance Requires Sustained Capital

According to market data presented at the conference, Nigeria’s equities market delivered a strong first-quarter performance in 2026, rising by 29.35 percent, with trading volumes exceeding 52 billion shares.

The Nigerian Exchange also crossed a major milestone, with the All-Share Index surpassing the 200,000-point mark, signalling strong investor participation and market momentum.

Despite these gains, FSDH stressed that performance alone does not guarantee long-term market stability. Sustained capital inflows remain essential to maintaining liquidity, supporting valuations, and enabling continued growth.

Role of Institutional Investors and Banks

FSDH highlighted the critical role of institutional investors in deepening Nigeria’s capital market. Pension funds, in particular, were identified as a key source of long-term capital due to their scale and investment horizon.

Industry stakeholders noted that Nigeria’s pension assets could approach ₦100 trillion in the coming years, providing a significant pool of capital for infrastructure and equity market investment if properly mobilised.

Banks were also identified as central to this process, with recent recapitalisation efforts expected to strengthen their capacity to support lending and capital market participation.

Building an Investable Nation

FSDH emphasised that attracting long-term capital requires more than strong market performance. Key structural factors include regulatory consistency, policy clarity, and institutional trust.

According to the firm, an “investable nation” depends on transparent markets, sound governance, and confidence that capital can be deployed safely and productively.

Regulators, including the Securities and Exchange Commission, also underscored the need for forward-looking regulation that anticipates market evolution and supports innovation while maintaining stability.

Addressing Structural Gaps in the Market

Stakeholders at the conference identified persistent structural challenges within Nigeria’s capital market. These include limited market depth, liquidity constraints, and weak linkages between capital markets and the real economy.

Bridging these gaps will require coordinated action across government, financial institutions, and private sector participants.

Efforts to improve risk management frameworks, strengthen investor protection, and enhance market transparency were highlighted as critical to unlocking long-term capital flows.

Implications for Investors and Policymakers

For investors, the emphasis on long-term capital signals a shift toward more sustainable investment strategies, prioritising stability over short-term returns.

For policymakers, the message is clear: strengthening market institutions and regulatory frameworks is essential to attracting and retaining capital.

A deeper, more resilient capital market could support broader economic objectives, including infrastructure financing, private sector growth, and job creation.

FSDH’s call for long-term capital underscores a critical transition in Nigeria’s equities market from rapid growth to sustainable development. While recent performance reflects strong investor confidence, maintaining momentum will depend on the ability to attract stable, long-term funding.

Strengthening institutional participation, improving regulatory clarity, and building market trust will be central to ensuring that Nigeria’s capital market continues to support long-term economic growth.

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