The Nigerian Stock Exchange (NSE) has been ranked 2020’s best-performing stock market among the 93 equity indexes being tracked by Bloomberg across the world.
According to the American news medium, Nigerian stocks are headed for their highest annual gain in seven years riding on low yields in the country’s fixed-income market.
The equities benchmark index in Nigeria recorded its best annual return since 2013, rising 45.7% in 2020.
In a note to clients on Tuesday, Chapel Hill Denham said investors’ appetite for riskier assets have remained strong due to persistent low yield on fixed-income instruments.
Bloomberg reports that this has been buoyed by traders positioning for Dangote’s share buyback programme due this week.
According to Chapel Hill Denham, equities will continue to outperform bonds in 2021 given the current overstretched fixed-income valuations.
The Lagos bourse gained 0.75% to 39,092 as of 13:47 p.m on Tuesday, to reach its highest level since June 2018.
The all-share index which opened at 38,800.01 inched higher by 310.16 points or 0.80 percent to cross the 39,000 mark and close at 39,110.17.
Also, the market capitalisation rose by N167 billion to close at N20.446 trillion compared with N20.279 trillion achieved on Thursday.
The rally was attributed to the dovish stand of the Central Bank of Nigeria (CBN).
In September, the apex bank reduced the base Monetary Policy Rate (MPR) by 200 basis points to 11.5 percent.
The move was to boost lending, discourage savings and drive growth to counter the effect of the pandemic on the economy, while also keeping rates low in the fixed income market.
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