 |
A
surge in the oil price and a brighter economic outlook have boosted Nigeria's
equity market
|
Nigerian stocks have
jumped to a nine-year high as Africa's biggest economy emerges from its worst
recession in 25 years, buoyed by the high price of oil at US$69 a barrel.
AFP
report continues:
The
country's main equity index grew 12% this year in dollar terms, pushing it to
the highest level since 2008, according to Bloomberg News.
Investors
are buying the cheapest stocks in Africa, confident that the Nigerian economy
is set to recover and oil prices will stay high.
"2018
is a story of return of Africa," Funmi Akinluyi, head of frontier and
Africa listed equity investments at London-based Silk Invest, told AFP.
"The
fact that we've seen oil trade to about US$69 (per barrel) gives comfort that
results will continue to increase.
"We've
also had information that GDP is steadily picking up, so all that has given
investors reassurance that Nigeria is fine."
After
shying away from Nigeria following the 2014 oil crash, investors started taking
interest in the country again last year when the central bank introduced a
special trading window for foreign portfolio investors.
The
banking and pension sectors were the top-performing indexes of 2017, according
to the Nigerian Stock Exchange in a year-end review posted on Twitter.
"The
economy is not going to race away and have fantastic growth but the equity
market is based on a lot of bad news and a lot of bad news is going away
now," said Paul Clark, a fund manager at Ashburton Investments.
"I
think the risks have reduced significantly."
Nigeria's
GDP is set to grow by 2.1% in 2018, according to the International Monetary
Fund.
On
Tuesday, the latest data from the National Bureau of Statistics showed that
annual inflation slowed for the 11th month in a row in December to 15.4%.
The central bank has said it wants to cut its benchmark rate from 14% if inflation continues to fall.
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