Nigerian stock market will post 50% return on investments in 2010, boosted by the new Asset Management Company (AMC) and an increase in state spending, according to analysts.

The Senate has passed the bill establishing the AMC, paving way for banks to resume lending and raise the prospects for the sale of troubled banks.

AMC aims to take toxic debt off lenders’ balance sheets estimated at N2 trillion, allowing them to resume full operations.

Central bank of Nigeria governor Sanusi Lamido Sanusi says the bill signals a major boost for CBN's reform agenda.

Reforms introduced by the CBN, including plans to set up the asset management company and requirements that banks make full provisions for bad debts, have boosted the market.

Banks that had been averse to lending, due to bad loans should now begin to offload them in exchange for government bonds.