How Nigeria Lost Crown as World’s Best-Performing Stock Market After Five Weeks

Nigeria has lost its position as the world’s best-performing stock market, five weeks after taking the crown from South Korea, as a sharp rebound in Korean equities pushed the Kospi back to the top of Bloomberg’s global ranking.

Data covering 92 global stock exchanges tracked by Bloomberg showed that, as of August 14, South Korea’s Kospi had gained 68.52% year to date in dollar terms, ahead of Ghana’s Composite Index at 66.68% and the Nigerian Exchange All-Share Index at 65.23%.

Nigeria took the top spot on July 10, extending a remarkable rally driven by foreign-exchange reforms, relative naira stability, stronger corporate earnings and domestic investor demand.

Why South Korea reclaimed the lead

South Korea’s stock market has staged a sharp rebound after a heavy selloff in July.

On August 13, the benchmark Kospi rose more than 4%, leaving it about 23% above its July 30 low and meeting the widely used definition of a technical bull market, according to Yahoo Finance.

The turnaround followed a plunge of about 40% from the Kospi’s June 22 peak to its July 30 trough, with losses concentrated in market heavyweights Samsung Electronics and SK Hynix.

The two chipmakers have since led the recovery. Samsung Electronics and SK Hynix rose more than 5% and 7%, respectively, on August 13 as optimism over artificial-intelligence-driven demand for memory chips lifted semiconductor stocks.

Fundstrat Global Advisors said the recovery in the two companies could give the broader South Korean market further momentum.

Mark Newton, head of technical strategy at Fundstrat, said the iShares MSCI South Korea ETF had broken through key technical levels as Samsung and SK Hynix recovered, improving the near-term outlook for Korean equities.

Macquarie Capital said the steep July losses appeared to have been driven more by investor positioning and fund flows than by a deterioration in market fundamentals.

“The volatility is over,” the bank’s analysts wrote.

Why Nigeria reached the top

Nigeria’s rally has been built on a different foundation.

Foreign-exchange reforms, a more stable naira, stronger corporate earnings, banking recapitalisation, higher dividends and strong domestic investor participation have supported the Nigerian Exchange.

The currency story is particularly important because the Bloomberg ranking measures returns in US dollars.

The naira has undergone a broader turnaround following two years of sharp depreciation after major foreign-exchange reforms in 2023 and 2024.

The currency stabilised in the second half of 2025 and appreciated against the dollar, eventually exiting Africa’s 10 worst-performing currencies in October 2025.

By August 14, the average official exchange rate had strengthened to about ₦1,357.7/$, its strongest level in two months.

Data from African Markets showed that the naira was the second-best-performing currency among 17 African currencies against the dollar year to date as of August 16, with a gain of nearly 6%.

Earnings are adding to the story

For dollar-based investors, a stronger currency means that gains in Nigerian equities are less likely to be eroded by foreign-exchange losses.

Temi Popoola, group managing director and chief executive officer of Nigerian Exchange Group, attributed Nigeria’s rally to the Investments and Securities Act 2025, foreign-exchange reforms, banking recapitalisation, stronger corporate earnings and higher dividends.

He described the performance as more than rising share prices, calling it a broad “re-rating of Nigeria” driven by returning investor confidence, deeper capital formation and improved corporate fundamentals.

Popoola cited stronger profits at MTN Nigeria, Dangote Cement, Aradel Holdings, Seplat Energy and BUA Cement.

According to him, the combined profit before tax of the selected companies rose about 6.2 times from 2023 levels. MTN Nigeria’s profit before tax increased from ₦200 billion to ₦1.09 trillion, while Dangote Cement’s rose from ₦240 billion to ₦981 billion.

Who is driving the Nigerian rally?

One of the most important features of Nigeria’s performance is that foreign investors are not responsible for most of the buying.

Ray Ndlovu, Bloomberg’s emerging markets reporter, said on the Next Africa podcast that domestic investors accounted for about 89% of participation and transactions on the Nigerian market during the first half of the year, compared with 11% for foreign investors.

“It’s in fact local investors that are driving the gains that are being translated on the exchange there,” Ndlovu said.

Foreign investors remain interested but are waiting to see whether Nigeria’s reforms are durable before committing more capital.

“Some are in quite a waiting position and looking to see if the reforms or the story of reforms in those markets are lasting,” Ndlovu said.

Domestic investors may be driving today’s gains, but foreign investors could determine whether the rally becomes a sustained repricing of Nigerian assets.

Can Nigeria reclaim the crown?

Nigeria’s loss of the top spot comes after some recent profit-taking.

Between August 10 and August 14, the NGX All-Share Index fell 2.78% to 242,619.2 points, while market capitalisation declined to ₦156.6 trillion from ₦160.4 trillion.

The pullback remains modest compared with the market’s longer-term gains. According to NGX, market capitalisation reached ₦158.1 trillion on August 5, while the All-Share Index rose from 52,974 points in the first half of 2023 to a record 244,912.24 points.

Ndlovu said investors increasingly believe that Nigeria’s reforms, particularly foreign-exchange liberalisation, have taken root.

“There’s no way that Nigeria would want to go back to having multiple exchange rates because they know the pain of being in that sort of space,” he said.

Nigeria will now need to maintain currency stability, continue reforms, deliver earnings growth and deepen market liquidity if the rally is to become more durable.

South Korea faces a different test: whether the AI and semiconductor boom can sustain its rapid rebound.

Meanwhile, Ghana’s position as the second-best-performing market shows that Nigeria’s loss of the crown does not weaken the broader African equity story.

The continent is increasingly appearing in global performance rankings. Bloomberg reported in October 2025 that Ghana was the world’s best-performing market in dollar terms, followed by Zambia, while Nigeria ranked 14th, Kenya 15th and South Africa 21st.