Nigeria’s stock market has emerged as the world’s best-performing equity market in dollar terms this year, overtaking South Korea. Data compiled by Bloomberg and reported by Daba Finance showed that the Nigerian Exchange Limited (NGX) has returned about 67 per cent in dollar terms in 2026, edging South Korea’s Kospi index, which has gained 66 per cent.

The development follows a sharp decline in the South Korean market after investors reassessed the outlook for artificial intelligence-related stocks.

The strong performance of Nigerian equities has been supported by ongoing economic reforms, firmer crude oil prices, improved foreign exchange supply and the appreciation of the naira. The local currency has strengthened by about four per cent against the dollar this year, helping foreign investors preserve their gains, while the South Korean won has weakened by about five per cent.

The bullish sentiments continued yesterday as market capitalisation which stood at N150.271 trillion on Monday rose to N156.547 trillion yesterday, adding over N6 trillion to investors wealth.

The rally on the Nigerian Exchange has been driven mainly by banking, oil&gas stocks and industrial goofs sector which have attracted strong investor demand amid expectations of stronger corporate earnings and improving macroeconomic conditions.

Investor sentiment has also been strengthened by expectations that dangote petroleum refinery and petrochemicals could eventually be listed on the Nigerian Exchange, a move that analysts believe would significantly deepen the market, increase liquidity and attract more local and foreign investors.

Further boosting market optimism is the decision by S&P Dow Jones to place Nigeria on its 2027 watchlist for a possible upgrade from standalone market status to frontier-market status. Analysts believe such an upgrade could increase Nigeria’s visibility among global investment funds that track benchmark indices and encourage fresh capital inflows into the market.

Commenting on the development, a research analysts at Cowry Asset Management, Charles Abuede, said Nigeria’s emergence as the world’s best-performing stock market in dollar terms reflects the positive impact of ongoing macroeconomic reforms and improving investor confidence.

He noted that exchange rate stability has played a significant role in enhancing returns for foreign investors, while stronger corporate earnings and improved market liquidity have continued to support demand for equities.

According to him, banking stocks have remained the major drivers of the rally because of their strong earnings outlook, ongoing recapitalisation and expectations of attractive interim dividends. He added that investors are also taking positions in fundamentally sound companies that are expected to benefit from the gradual recovery in the economy.

He said the prospect of listing large companies, particularly dangote petroleum refinery and petrochemicals, as well as Nigeria’s possible reclassification to frontier-market status by S&P Dow Jones Indices, could further improve market depth, attract long-term foreign capital and strengthen the country’s position in global investment portfolios.

Abuede, however, cautioned that sustaining the rally would depend on continued policy consistency, stable foreign exchange management, lower inflation, declining interest rates over time and the successful implementation of economic reforms. He added that broadening market participation across more sectors and encouraging additional listings would be critical to maintaining the momentum recorded by the Nigerian capital market.