Investment banking activity is expected to slow significantly in the first half of 2025 as market volatility and economic uncertainty continue to weigh on deal-making decisions, according to a report released by Morgan Stanley Research on Thursday.
The report highlighted that capital markets activity will likely remain subdued in the first half of the year as CEOs, boards, and sponsors delay negotiations and new deals due to heightened uncertainty.
However, analysts predict that market conditions will improve by the third quarter of 2025, leading to a more meaningful recovery.
The research note stated that recent market pullbacks, elevated volatility, and persistent economic concerns have disrupted the strong momentum seen at the start of the year.
Meanwhile, in the Nigerian capital market, the NGX All-Share Index edged up by 0.12 per cent to 106,220.62 points, marking a slight recovery after a series of declines.
Market capitalization also increased by 0.12 per cent to ₦66.52trn, reflecting cautious optimism among investors.
However, despite these gains, trading volume plunged by 77.2 per cent, indicating that many investors remain wary of current market conditions.
In contrast, the value of transactions surged by 62.34 per cent, suggesting a shift toward higher-priced equities or large block trades.
Geregu led in value traded, with transactions worth ₦7.76bn, maintaining a stable share price at ₦1,150.00. Tantalizer Plc recorded the highest trading volume, with 29.62mn shares exchanged, gaining 3.50 per cent to close at ₦3.25.
As market participants navigate ongoing economic uncertainty, attention will turn to the third quarter of 2025, when analysts expect capital markets activity to pick up.
The overall trajectory of investment banking and financial markets will depend on global economic conditions, inflation trends, and central bank policies in the months ahead.
