By Chinenye Anuforo
The Nigerian Stock Market has been ranked among five best performed stock markets in the world in 2017, report by CNN Money has shown.
According to the report, the Nigerian All-Share Index, though still miles below record highs set in early 2008, but a 43 per cent rally in 2017 has helped to close the gap.
Further analysis of the report shows that the index suffered in 2015 and 2016, as low oil prices, militant attacks, currency crisis, elections and Ebola affected investors’ sentiments.
“But oil prices moved higher just as the central bank made it easier to swap currencies and the economy has snapped out of recession in the same year,” explained Zin Bekkali, founder and CEO of Silk Invest.
Many analysts are optimistic that stocks could keep rising in 2018.
“If you look at where we stand today, the (Nigerian) market is still one of the cheapest markets on the planet,” said Bekkali.
The United States
US stocks were at front and centre as investors bet on strong economic growth, solid corporate earnings and hopes that President Trump would roll back regulations, still a number of markets even outperformed it. Trump also boosted markets with a big corporate tax cut.
The Dow Jones industrial average shot up by 25 per cent, the S&P 500 surged by 20 per cent and the tech-heavy Nasdaq index outshined them all with a stunning 29 per cent gain.
Argentina’s Merval index surged 73 per cent and hit a record high the day after Christmas.
The election of President Mauricio Macri in late 2015 proved to be a turning point; the economy is growing and stocks have rallied strongly. The Merval gained 45 per cent in 2016.
Macri pursued a number of economic reforms in 2017, helping to further boost business confidence.
“President Macri navigated political risks well in 2017, and with no elections scheduled in 2018, Argentina actually stands out as a political safe haven in Latin America for the year ahead,” said asset management firm, Algebris Investments.
Still, there’s more to be done: Inflation is above 20 per cent and the currency continues to weaken.
An attempted coup in 2016 and a series of terror attacks sent chills through the Turkish economy.
Yet the country’s benchmark index rallied by 43 per cent in 2017 as the government implemented temporary tax cuts and a loan guarantee programme that encouraged banks to lend to small businesses. GDP growth soared, reaching 11.1 per cent in the third quarter.
The stock market performance was also helped by the falling Turkish lira, said Neil Shearing, Chief Emerging Markets Economist at Capital Economics.
Now, experts are warning that the good times can’t last forever. “From here on, we think the economy is getting close to overheating,” said Daniel Salter, Global Head of Equities at Renaissance Capital.
The Hang Seng charged ahead by nearly 35 per cent, but China’s major mainland indexes in Shanghai and Shenzhen floundered. Shares in the Hong Kong-listed tech giant more than doubled over the past year and the company’s valuation briefly eclipsed that of Facebook (FB).
WeChat, the company’s popular mobile messenger, has close to one billion users, and investors have cheered forays into mobile gaming and video streaming,
Meanwhile, the Shanghai and Shenzhen markets have languished after state media convinced local investors to be cautious.
The biggest loser: Qatar
While most major stock markets posted sizable gains, the rising tide didn’t lift all boats.
Gulf nation, Qatar’s stock market, tumbled by 19 per cent amid a spat with its neighbours, Saudi Arabia, Bahrain and the United Arab Emirates.
Their decision to cut diplomatic ties and transport links with Qatar in June took the region by surprise.
The nations accused Qatar of funding terrorism, a charge it denies. Efforts to restore ties have so far failed.