NGX stocks you should own amid rising inflation in 2026

Nigeria’s headline inflation rate has moved up to 15.93% in May 2026 from 15.69% recorded in April 2026, according to the latest Consumer Price Index (CPI) report.

For investors, that raises one immediate question: which stocks should you be holding?

Inflation matters across every asset class; stocks, bonds, real estate, fixed deposits, because your return must beat the inflation rate, or you are losing money in real terms.

At 15.93%, any investment returning less than that is shrinking your purchasing power, not growing it.

But inflation does not affect all assets equally. Some sectors benefit when inflation rises, while some are hurt.

Before we go into the stocks to own in an inflationary environment, let us look at how inflation affects the equities market generally.

When inflation rises:

When inflation rises, central banks raise interest rates to cool the economy. Higher rates make borrowing more expensive for companies, compress profit margins, and lift the return on fixed-income instruments like bonds and treasury bills, making equities relatively less attractive. So, investors are likely to move out of stocks and into safer, yielding assets.

When inflation eases

On the other hand, when inflation eases, central banks cut rates. This will affect the yield from fixed income assets, which can fall below the inflation rate, leading to negative real returns. More so, with the rate, the cost of borrowing falls, which is likely to reduce interest expenses and then improve margins and profitability.

• With the narrower yield from the fixed income space, investors are likely to move into equities for inflation-beating stocks.

Overall, when inflation rises aggressively and persists, investors become more concerned with one practical question: which asset class can beat inflation; fixed income instruments, stocks, fixed deposits, etc.

• In this scenario, equities, despite their volatility, become an attractive destination simply because they offer the possibility of inflation-beating returns.

The open question heading into H2 2026

The open question now is going into H2 2026, and with inflation rising again, which sectors or specific stocks can investors consider?

But first, let us look at how the market and the sectors have performed; although past record or performance is not a guarantee for future performance, but at least it can provide a guide.

Over the past five years, the broad market has delivered positive returns every single year.

• From a modest 6.1% in 2021, it climbed to 19.2% in 2022. Even through 2023 and 2024 when inflation was high, the NGX ASI closed strongly at 45.9% and 37.6% respectively.
• In 2026, the market returned 29.35% in Q1, and by May it had reached an all-time high of 60.90% year-to-date before pulling back slightly to 56% in June, where it currently stands.

Sectorally, going into H2, the Oil and gas sector has been the flyer, with the index hitting a high of 128% in April before pulling back to 113% in June.

• The industrial sector has also done well, with the index at over 100% YTD, the second best, followed by the banking sector index at 52%

What to look for in a stock during rising inflation

Beyond sector position, there are certain characteristics investors should consider before picking a particular stock during this rising inflation environment.

• Can this company raise its prices without losing customers?
• Does it own hard assets that appreciate with inflation?
• Is debt manageable at higher interest rates?
• Is any part of its revenue dollar-linked or commodity-linked?
• Are its earnings predictable and consistent?
• Is the stock trading at a discount to its peers or historical valuation?
• Is there a contrarian case; a good business temporarily mispriced by the market?

Each of the stocks and sectors recommended below has been assessed against these seven questions. Here is what the analysis shows.

Oil & Gas

Specifically, Aradel and Seplat are our picks from this sector. Both qualify on fundamentals; their five-year revenue growth of over 1,200% each reflects genuine business transformation, not inflated share prices chasing speculation.

Also, both companies are trading below their total asset value; you are buying N1 of assets for less than N1 in both cases. Aradel at 0.70x is cheaper on this basis than Seplat at 0.80x.

This is a powerful valuation argument in an inflation environment; hard assets appreciating in replacement cost while the market values them below book value.

However, Aradel’s RSI 39.99 offers a technically healthy entry at N1,670 per share. Seplat at RSI 70.68 and N11,363.90 per share is technically overbought; the business is strong, but the entry point is not.

For Seplat, though it is good in an inflationary environment, investors should wait for a pullback; but for Aradel, it has a comfortable starting point.

Cement Companies

The cement companies; Dangote Cement, BUA Cement, and Lafarge Africa (WAPCO) make a strong case for consideration.

All three are price makers, meaning they can raise prices without losing customers in a market where housing demand consistently outpaces supply.

They also own hard assets that appreciate as construction costs rise, making them natural inflation-environment holdings.

All three qualify on the core criteria. Although their valuation is not cheap enough, but in a rising inflation environment with construction demand structurally elevated, the risk-reward is favourable.

Banking Sector

Five banks- GTCO, Zenith Bank, Wema Bank, Fidelity Bank, and Stanbic IBTC- make a strong case for consideration in a rising inflation environment.

Unlike most sectors, banks are direct beneficiaries of rising inflation. When inflation rises, interest rates follow. The gap between what banks charge borrowers and what they pay depositors widens, and that gap is where bank profits are made.

• All five qualify on the core criteria. GTCO leads on margin efficiency with a NIM of 40%,
• Zenith and Fidelity offer oversold entry points; Wema delivers the highest return on average equity in the sector at 44.35%, and StanbicIBTC brings earnings diversification through its wealth and asset management businesses.

Valuations across the five are reasonable; none are expensive relative to the profitability they deliver.

ICT — MTN Nigeria

MTN Nigeria fits into some of our criteria and, as such, is a stock to consider in a rising inflation environment, despite its debt level.

• It has market dominance, essential service characteristics, and has over 70 million subscribers.
• Trading at 13x earnings is undervalued on earnings basis. The Relative Strength Index at 47.87 confirms the stock has not been overbought, so there is technical room to run.

Sectors to underweight

Consumer goods sector index at 20.08% YTD tells the most honest story about where ordinary Nigerians are in this recovery.

Two years of elevated inflation gutted household purchasing power; although they started recovering in 2025 due to stability in FX, it still warrants caution, now that inflation has started rising.

The insurance index at 5.89% YTD is the biggest laggard in the market. A brief spike to 58.62% in April was fully reversed by May, confirming it was a single-stock event, not a sector re-rating.

The insurance sector is greatly influenced by purchasing power, although it is supposed to be essential and mandatory. Until purchasing power genuinely returns to Nigerian households, the insurance sector will remain structurally constrained regardless of its essential character.