Nigeria: soaring Lagos stock market
The Lagos stock exchange has been breaking performance records since September 22, 2020. PIUS UTOMI EKPEI / AFP
Text by: RFI Follow
2 min
It's Christmas before its time on the Lagos Stock Exchange in Nigeria.
Tuesday, October 6, the index of the thirty largest stocks jumped 5.7%, the second best performance of the last fifteen years.
For the past month, the Nigerian stock market has been in great shape and has gained more than 13% as the country goes through a severe recession.
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Never has the disconnect between the real economy and finance been so striking in Nigeria.
As the country grapples with a recession synonymous with job losses and deep poverty, the small world of finance is celebrating.
Since September 22, the stock market has turned on the turbo and daily transactions have not fallen below the 4 billion naira mark.
The euphoria started with a flood of dividends paid in mid-September by the country's largest banks.
The Covid-19 pandemic did not affect their results and the five largest paid 37 billion naira to their shareholders.
At the same time, all that money got stuck in Lagos due to foreign exchange restrictions imposed by the authorities who are currently fighting a depreciation of the currency.
It was therefore necessary to invest this money.
Usually, financial institutions flock to Treasury bills, but they are currently less attractive due to very high inflation.
Investors and banks were therefore left with billions to invest and they only had one profitable investment left, stocks, hence the stock market boom.
It remains for the most prudent to meditate on this financial adage: "
On the stock market, you go up by the stairs and you always go down by the elevator!"
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Nigeria
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