{"id":10547,"date":"2021-01-11T10:59:47","date_gmt":"2021-01-11T09:59:47","guid":{"rendered":"https:\/\/ecomnewsafrique.com\/?post_type=news&p=10547"},"modified":"2021-01-11T10:59:48","modified_gmt":"2021-01-11T09:59:48","slug":"nigeria-the-lagos-stock-exchange-posts-a-performance-of-47-3-in-2020-a-record","status":"publish","type":"news","link":"https:\/\/ecomnewsafrique.com\/en\/2021\/01\/11\/nigeria-the-lagos-stock-exchange-posts-a-performance-of-47-3-in-2020-a-record\/","title":{"rendered":"Nigeria: The Lagos Stock Exchange posts a performance of + 47.3% in 2020. A record"},"content":"\n \n \n \nAn economy disrupted by Covid-19 and declining profitability on loans to the federal government due to rising prices, have prompted Nigerian investors to seek refuge. The local stock exchange was one of them, which had a very positive impact on its annual performance.\n\n \n \n\n\n \n \n \nThe Nigerian All Share Index, which represents all the companies listed on the Lagos Stock Exchange in Nigeria, increased by 47.3% during the year 2020, according to data from the Capital IQ platform. \n\n \n \n\n\n \n \n \nThis is the best performance of stock market indices in the world over the period. It is ahead of benchmarks such as the S&P 500, which brings together the 500 largest companies on the American stock exchanges and which grew “only” by 15.9% over the same period.\n\n \n \n\n\n \n \n \nFollowing purely financial logic, investments only make investments in relation to margins. From this point of view, each position acquired on the Lagos stock exchange generated a more attractive return than if it had been taken on the 500 largest American companies. \n\n \n \n\n\n \n \n \nUnder these conditions, the Nigerian All Share Index will also have been better than indices like the MSCI Frontier Market Africa, which brings together the 28 most important companies listed on 13 African financial markets, and which posted a return of -2.1% on the period. \n\n \n \n\n\n \n \n \nThe Nigerian index was also better than the CAC 40 which includes the 40 most important companies listed in France (8.1%), the Moroccan MASI (-6.8%) and the top 10 companies listed on the Regional Stock Exchange. UEMOA Securities (-10.8%). \n\n \n \n\n\n \n \n \nThe performance of the Nigerian stock market is finally nearly twice as good as that of the same period in 2019 (+ 27.4%) This development may be surprising, especially since Africa’s leading economy in terms of Gross Domestic Product experienced during the year its second recession in five years, weighed down by a marked drop in oil prices, its main export product, and by the negative effects of the Coronavirus pandemic. \n\n \n \n\n\n \n \n \nThere has also been a continued disinvestment of non-Nigerian residents in this stock market. But there is a reason for this performance. During the year, the confinement imposed by the federal government of this country, came in addition to the closure of borders with neighboring countries. \n\n \n \n\n\n \n \n \nIn this context, people and structures with savings had no other choice than to invest their money in debt securities issued by the State. The strong demand for these products has caused a historic decline in interest yields. \n\n \n \n\n\n \n \n \nThe Nigerian Stock Exchange: A Safe haven for investors from soaring inflation. In addition to this drop in interest, inflation (price hikes) reached levels that had not been seen for 3 years (just over 14%), nullifying the small margins generated on government bonds. \n\n \n \n\n\n \n \n \nWith foreign investors leaving Nigeria, shares of listed companies have proven to be more accessible and profitable, which justifies the strong increase in the index. \n\n \n \n\n\n \n \n \nThe evolution should depend on the progression of the global context of the pandemic, but also on the direction of oil prices, two important factors for the recovery of the economy of Nigeria. The federal government has also decided to reopen its borders. \n\n \n \n\n\n \n \n \nThis should pull down inflation, especially food inflation, and restore interest on short-term government bonds. It must also be said that this profitability of the Nigerian stock market is relative. \n\n \n \n\n\n \n \n \nThe Ecofin Agency was able to note that in absolute value the overall stock market capital gain generated by the Top 20 listed companies in Africa, including 2 from Nigeria, was only $ 28.8 billion, against more than $ 3,900 billion. for the same group of companies in the North American financial markets, and nearly $ 1017 billion for that of Asia. And setting aside China, the factor of stock speculation took precedence over the performance of the real economy. \n\n \n \n\n\n \n \n \nSource Ecofin Agency \n\n \n \n\n","author":15,"featured_media":0,"comment_status":"closed","ping_status":"closed","template":"","tags":[713,699],"location":[513],"class_list":["post-10547","news","type-news","status-publish","hentry","tag-economic-analysis","tag-economy","location-nigeria-en"],"short_url":"","have_related_news":"done","chapo":"An economy disrupted by Covid-19 and declining profitability on loans to the federal government due to rising prices, have prompted Nigerian investors to seek refuge. 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