Nigerian Stock Exchange has been ranked the world’s best-performing stock market year-to-date.
The equities benchmark index in Africa’s largest economy recorded its highest return, rising 45.7 per cent this year, the most among 93 equity indexes tracked by Bloomberg.
According to Bloomberg News, investors’ appetite for riskier assets have remained strong due to persistent low yield on fixed-income instruments, Chapel Hill Denham said in a note to clients on Tuesday. This has been buoyed by traders positioning for Dangote’s share buyback program due this week.
Equities will continue to outperform bonds in 2021 given the current overstretched fixed-income valuations, according to Chapel Hill Denham.
The Lagos bourse gained 0.75 to 39,110.17 to reach its highest level since June 2018.
According to the exchange, equities continue to respond positively to macroeconomic policy changes such as the cut in Monetary Policy Rate by 100 basis points from 12.5 per cent to 11.5 per cent by the Central Bank of Nigeria in September 2020.
“It has also been observed that investors are targeting Nigerian companies with strong fundamentals with the expectation that they will best overcome the onslaught of COVID-19 and be able to distribute dividends to shareholders. This is particularly important given the low-interest-rate and negative real yield environment”.