(Ecofin Agency) - The Lagos financial market is among those that have challenged covid-19 with record performances. All the compartments of this stock exchange experienced a very positive dynamic last year. The market posted the best performance of all the stock exchanges that are followed by international investors, with an index up 50%.
At the end of the year, the NSE's market capitalization was up 62.42% from 12.97 trillion naira in 2019 to 21.06 trillion naira in 2020. The NSE Industrial Index became the best performing index in 2020 (with returns of +90.81%) followed by the NSE Premium Index (+64.01%), according to an official document.
Driven by federal government bond issues, the bond segment also grew by 35.7%, ending with a capitalization of 17,500 billion naira. The best-performing segment was that of listed index funds.
Market capitalization increased by 272.30% from 6.58 billion naira in 2019 to 24.51 billion naira in 2020, while trade volumes increased by 218.23% from 4.15 million units in 2019 to 13.20 million units in 2020. Nigerian financial market experts attribute this good feat to increased demand from investors (who were disappointed by the low yields on treasury bills) and the willingness to switch to other alternatives.
Let’s point out that for most of them, companies listed on the Nigerian stock market are undervalued relative to their potential. So far, most Nigerian investors have opted for the orthodox path of safety, investing the bulk of their investments in government bonds and securities or very safe companies.
But in 2020, not only were they not very profitable, but the gains generated were wiped out by inflation that reached 18% at the end of December, according to the local investment firm FSDH Capital.