The Nigerian equities have been rated the world’s best-performing equity market in dollar terms this year based on the Federal Government’s sundry economic reforms, a stronger Naira and improving foreign exchange (FX) liquidity in the market.
A news report from Bloomberg, a leading global financial news service provider, on Thursday indicated that Nigeria’s benchmark stock index had returned 67 per cent in dollar terms so far this year, higher that South Korea’s Kospi index, which recorded 66 per cent return before sliding into a technically bearish market.
Bloomberg, in its study covering 92 global stock exchanges, reported that Nigeria ranked as the top-performing equity market worldwide, ahead of South Korea, Ghana and Taiwan.
The news medium clarified: “Nigerian equities have overtaken South Korea’s to hand investors the highest dollar-based returns this year, as souring sentiment on artificial-intelligence stocks pushes the Asian nation’s world-beating rally into bear territory.
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“The benchmark index in Africa’s largest oil producer has returned 67 per cent in dollar terms this year, outpacing the 66 per cent gain for the Kospi index, according to data from the 92 global stock exchanges tracked by Bloomberg”, it added.
According to the research’s findings by Bloomberg, while South Korea’s market had ebbed in momentum amid concerns over the sustainability of the global artificial intelligence boom, Nigeria’s equities market continued to attract investors on the back of improving macroeconomic fundamentals.
Bloomberg maintained that the Kospi index entered a technical bear market this week after declining 22 per cent from its June 19 peak as investors increasingly questioned whether the rapid surge in artificial intelligence-related stocks could be sustained.
It added that the weakening of South Korea’s currency had also weighed on investor returns as the country’s won had depreciated by about five per cent against the dollar since the beginning of the year, making it the fourth-worst-performing currency in Asia.
On Nigeria’s capital market’s improved performance indices, Bloomberg reported that the “Nigerian equities have rallied this year on the back of macroeconomic reforms, higher international crude oil prices, and improved foreign exchange liquidity. Nigerian stocks have rallied this year on macroeconomic reforms, higher oil prices and better foreign exchange supply, with the naira gaining 4 per cent since January.”
Nooting that financial institutions listed on the Nigerian Exchange have played a leading role in driving the market’s exceptional performance, Bloomberg further reported that financial services firms on the Nigerian Exchange had led gains in the benchmark index.
For instance, it noted that while Fortis Global Insurance Plc, an insurer, had delivered returns of 1,400 per cent in dollar terms during the year under review, adding that unlike the Kospi, companies listed on Nigeria’s stock exchange are not directly exposed to artificial intelligence.
Bloomberg quoted a Lagos-based trader at StoneX Nigeria Financial Limited, Damilola Okeleye, as saying that investor confidence in the Nigerian equities market has been buoyed by ongoing economic reforms and expectations surrounding a potential listing of the Dangote Petroleum Refinery.
The investment expert expatiated: “Unlike the Kospi, companies listed on Nigeria’s stock exchange are not directly exposed to artificial intelligence. Investors buying Nigerian equities are attracted by different factors. Nigeria’s economic reforms and the potential listing of the continent’s largest crude processor, Dangote Petroleum Refinery and Petrochemicals FZE, have been a strong driving force behind the gains recorded so far this year.”
The financial services news medium noted that expectations surrounding the Dangote refinery’s possible listing had added to optimism in the domestic capital market, with investors anticipating that the listing of the company will deepen the market capitalisation and attract more foreign portfolio inflows.
Experts believe that the latest ranking of the Nigerian Exchange underscores the positive impacts of ongoing reforms of the Federal Government across the broad spectrum of the broader economy, particularly in Nigeria’s financial markets.
Since 2023, the President Bola Tinubu-led administration has implemented key economic policy measures, including the unification of foreign exchange (FX) windows, the removal of petrol subsidies and other fiscal and monetary reforms aimed at restoring investor confidence in the nation’s economy for its sustainable growth.
