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 Africa’s largest economy recorded its highest return, rising 45.7% this year, the most among 93 equity indexes tracked by Bloomberg. It’s the world’s best performing stock market year-to-date.
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 39,092 as of 13:47 p.m. local time, to reach its highest level since June 2018.