T. Rowe Price Group Inc. sees continued investment potential in Nigerian equities, even after a 64% year-to-date rally rendered the Nigerian Exchange (NGX) the world’s second-best performing stock market after South Korea’s Kospi.
Speaking on Bloomberg TV’s Next Africa, Johannes Loefstrand—portfolio manager for T. Rowe Price’s $310 million Frontier Markets Equity Fund—highlighted that structural policy shifts, including fuel subsidy removals and FX liberalizations, have opened attractive valuation entry points for active stock selectors.
As of mid-2026, the fund held active equity stakes in market heavyweights including Guaranty Trust Holding Co. (GTCO) and Dangote Cement Plc.
While local institutional investors have been the primary beneficiaries of the equity surge, foreign participation faced temporary friction earlier in the year due to market uncertainty around the SEC’s T+1 settlement transition and FTSE Russell’s index review status.
Market Drivers & Sovereign Debt Concerns
-
Industrial & Banking Sector Appeal: Loefstrand pointed to heavy industry and building materials—specifically cement manufacturing—as key beneficiaries of Nigeria’s ongoing infrastructure push and pricing power, providing real earnings protection against domestic inflation.
-
Energy Tailwinds: As Africa’s top oil producer, Nigeria’s corporate earnings landscape has also benefited from elevated crude oil prices caused by Middle East supply disruptions and geopolitical risk premiums.
-
Macro Headwinds & Regional Debt: Despite optimism on corporate earnings, T. Rowe Price remains cautious about broader sub-Saharan sovereign debt dynamics. According to African Export-Import Bank (Afreximbank) estimates, aggregate African external debt reached approximately $1.3 trillion, with debt accumulation expected to continue through 2029, albeit at a decelerating pace.
 Follow the MoneyCentral Nigeria channel on WhatsApp: Click here!
