The Nigerian Financial Market 2021 Review and 2022 Outlook: A Mix of Boom and Gloom

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Friday, January 21, 2022 / 11:33 AM / by Afrinvest Research / Header Image CreditAfrinvest Research


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2021 was a lackluster year for the domestic bourse, although trading closed on a positive note. This was shaped by a mix of rising fixed income (FI) yield, recurring FX issues, impressive corporate earnings, global oil price recovery, and a rollercoaster resurgence of the virus infections. The NGX All-Share Index closed 6.1% higher at 42,716.44 points slightly above the revised projection of 6.0% in our H1:2021 Economy and Financial Markets report.

Diverging from the bullish trend observed in 2020, fixed-income yields rose from record lows in 2021 propelled by shifts in market dynamics and the activities of market regulators. Consequently, the repricing of assets across segments of the market corrected valuations, pushing near historical levels to better reflect the shaky macroeconomic fundamentals and weak fiscal realities that persisted in 2021.

In 2020, the knock-on effect of macroeconomic headwinds, COVID-19 and EndSARs protest negatively impacted the real estate market triggering a slowdown in activities and demand. The sector rebounded in 2021 as economic activities picked up and enjoyed investors' interest due to the need for diversification and higher return.

 

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