Nigeria’s stock market has claimed the title of the world’s best-performing equity market in dollar terms for 2026, surpassing South Korea after a remarkable surge driven by economic reforms, stronger investor confidence and improved foreign exchange liquidity. According to a Bloomberg report, Nigeria’s benchmark stock index has returned an impressive 67 percent since the start of the year, narrowly outperforming South Korea’s Kospi index, which posted a 66 percent gain.
The shift in global rankings comes as South Korea’s stock market lost momentum after the Kospi slipped into a technical bear market, dropping 22 percent from its June 19 peak. Investors have become increasingly cautious about the outlook for artificial intelligence-related stocks, while the South Korean won has weakened by 5 percent against the US dollar this year, making it one of Asia’s poorest-performing currencies.
Nigeria’s impressive market performance has been fueled by sweeping macroeconomic reforms, firmer global oil prices and improved foreign exchange liquidity. The naira has also strengthened by around 4 percent against the dollar since January, helping boost returns for foreign investors. Financial services companies listed on the Nigerian Exchange (NGX) have played a leading role in the rally, with Fortis Global Insurance Plc delivering an extraordinary return of nearly 1,400 percent in dollar terms this year.
Unlike South Korea, where technology and artificial intelligence stocks have largely influenced market movements, Nigeria’s rally has been powered by domestic economic improvements. Analysts believe renewed confidence in government reforms and increased market stability have encouraged both local and foreign investors to increase their exposure to Nigerian equities, contributing to the sustained upward trend.
Investor optimism could receive another boost after S&P Dow Jones Indices placed Nigeria on its 2027 watchlist for a possible return to frontier market status, citing improvements in the country’s regulatory environment. However, the agency noted that consistent policy implementation and stronger operational resilience remain essential before a final decision is made. Meanwhile, FTSE Russell has postponed a decision on Nigeria’s re-entry into its Frontier Market Index as it continues to evaluate the country’s transition to a T+1 settlement cycle for international investors.
source: The cable