Stock Market
COVID-19, Recession, Unemployment Have Nothing on Nigerian Stock Exchange in 2020, Leads Global Stocks With 50% Gain
What a year to remember, despite COVID-19, extensive plunged in business activities, high unemployment rate and eventual economic recession, the Nigerian Stock Exchange closed 2020 with a 50.03 percent gain to lead global stock markets as the best performer of 2020.
In a year that started slow and was grounded by COVID-19 for most of the first three quarters, the Nigerian Stock Exchange gained 31.90 percent in the final quarter of 2020 alone and 14.92 percent in the month of December after both the Federal Government and the Central Bank of Nigeria deployed a series of measures to curtail the negative impact of COVID-19 on the economy.
The bourse opened the first two quarters of the year in red with several foreign investors pulling out following numerous negative projections by global experts that COVID-19 will ground business activities in Africa and likely plunged Nigeria’s economy the most given its overexposure to crude oil and reliance on importation for most of its consumption.
However, immediately Federal Government partially lifted restrictions and announced over N3 trillion stimulus package to mitigate the effect of COVID-19, local investors jumped back into the Nigerian Stock Exchange and took it to a record high after the Central Bank of Nigeria lowered the interest rate to 11.5 percent in another move to further stimulate the real sector.
Top executives of listed companies took advantage of the policy to increase the stake across the board as reported by Investors King throughout the year.
Still, activity in the real sector of the economy remained weak as evidenced in the latest manufacturing purchasing index released by the Central Bank of Nigeria. Businesses and investors had abandoned the real sector for the stock market, a move largely blamed on the rising economic uncertainty and plunged in productivity in general.