Nigeria is leading Africa’s year to date (YTD) equity returns that validates investors’ confidence that president Tinubu’s transformation policies will unlock the potentials in the economy.
The country’s benchmark stock index gains stood at 61.42 percent, according to United Capital’s Monthly Economic and Financial Markets Report glimpsed by MoneyCentral.
That compares with Ghana equity benchmark returns of 61.24 percent; Angola, (36.70 percent); 24.06 percent Egypt, (24.06 percent); South Africa (-6.35 percent), and Morocco, (-7.12 percent).
“Nigerian equity market also remained attractive looking at the current adjusted return,” said analysts at United Capital.
A driver of the equities market in Nigeria has been the banking sector recapitalisation, macroeconomic stability, foreign and local investor participation, and earnings growth that lifts hopes of a bumper dividend.
There has been an improvement in macroeconomic numbers since the introduction of economic policies such as the removal of the expensive subsidy on fuel and the liberalization of the foreign exchange market.
Nigeria’s gross foreign-exchange reserves jumped by about $3.7 billion in a single trading day to $58.8 billion, the highest level since 2008. The central bank is building its dollar buffer as remittances and portfolio inflows recover.
Nigeria’s inflation rate fell more than expected in September as headline inflation slowed to 14.63 percent from 15.39 percent in August, the National Bureau of Statistics said on Thursday. That is 6.35 percentage points below the 20.98 percent recorded a year earlier.
Of course, macro stability has also been strengthened by the sharp rise in crude oil price on the back of the war in the Middle East that led to the closure of the Strait of Hormuz, which handles roughly 20 percent of the world’s petroleum and liquefied natural gas (LNG).
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