2017’s 15 best-performing stock markets in the world
The table below shows 2017’s top 15 best-performing stock market in the world as Nigerian Stock Exchange (NSE) ranked second as of the last trading day.
The success of global economy this year will depend largely on the outcome of policies put in place by the government.
For instance, in the United States, President Donald Trump’s new tax laws are expected to galvanize job creation as many firms who had hitherto set up factories overseas are expected to move head offices home.
The reduction in corporate taxes to 21 percent from 35 percent means companies will record robust profit growth, declare a bumper dividend and have more money to fund future expansion plans.
The market reacted immediately to the above news investors swoop at stocks of major U.S firms that would benefit from the new policy.
In Argentina, President Mauricio Macri’s election in 2015 has brought back relative stability to the country and the bourse. Proactive policies have underpinned the economy.
Nigeria, Africa’s largest economy, existed a recession in 2017 as the economy expanded by 0.55 percent and 1.40 percent, thanks to a rebound in oil production.
The performance of the country’s bourse otherwise known as the NSE was underpinned by central monetary policies that resulted in increased liquidity in the foreign exchange market.
The availability of foreign currencies ameliorated the pains of manufacturers as they were able to import raw materials and equipment for purpose of production. Firms that recorded lower profit or losses due to the economic downturn brought on lower oil price returned to the path of profitability.
Nigeria Stock Exchange (NSE) emerged as world second best-performing stock market for 2017, Its 41 percent year to date return (YTD) as of Friday- last closing day of the year is behind Argentina’s Buenos Aires Stock Exchange Merval Index (+89% year-to-date), and Hong Kong Hang Seng (+34.53).
However, analysts are of the view that Nigerian bourse may not sustain the growth momentum through 2018 despite improved economic fundamentals.
“Though Nigeria’s macroeconomic fundamentals remain strong largely on the back of stability in the oil sector, we struggle to see the NSE matching its 2017 performance next year,” said Gloria Fadipe, head of research at CSL Research Limited.
“Though expectations of relatively unattractive yields should move investments from the fixed income market to the equity market, pricier equity valuations (particularly for the more liquid stocks) will most likely undermine the attractiveness of Nigerian stocks and could potentially limit upside movements in the NSE in 2018,” said Fadipe.
Experts say the surge in the performance of the bourse in 2017 doesn’t signal economic growth or it isn’t a measure of economic performance as the vast majority of the populace wallow in abject poverty while a decrepit infrastructure is continually undermining industrialization.
Labour statistics released by the National Bureau of Statistics (NBS) Lin December last year showed that the unemployment rate increased to 18.8 percent in Q3 2017 from 14.2 percent in December 2016 despite an end to the country’s economic recession.
“This is not at all a robust GDP print, it still falls far short of the growth rates the Nigerian economy should be achieving,” said Razia Khan, chief economist for Africa at Standard Chartered.
“While improved oil production has driven some of the recoveries, the output numbers provided by the National Bureau of Statistics suggest that further upside from this source might be limited.”
Big Read |