The Nigerian stock market experienced significant losses last month, but it has now rebounded.
Foreign investors have returned to the market following the devaluation of the naira, resulting in a 7.5% gain in the benchmark index over the past two weeks.
The devaluation of the naira initially lowered the foreign-currency price of the stock market, but the influx of foreign investment has helped offset this impact.
Foreign participation in the Nigerian Exchange has reached its highest level since 2018, with overseas investment flows tripling to 12% of total trading volume in the past month.
The stock market’s recovery is viewed as a positive indication of foreign investors’ confidence in the Nigerian economy.
The devaluation of the naira has resulted in Nigerian stocks becoming more attractive to foreign investors. With their money, they can now purchase a larger number of shares.
The Nigerian stock market rebound is viewed as a positive sign for President Bola Tinubu’s incoming administration. President Tinubu aims to stimulate economic growth and attract foreign investment.
Despite the stock market’s recovery, its sustainability is uncertain due to various challenges. These challenges include high inflation, a weak currency, and political instability in Nigeria.
Nevertheless, the stock market’s resurgence indicates an ongoing interest from investors in Nigeria. If the government addresses the economic challenges, there is potential for the market to continue its recovery.
