Nigeria’s Index Surges 72% Outpacing South Korea’s AI‑Driven Rally, Allan Gray Says

Nigeria’s benchmark index has jumped 72% in dollar terms this year, putting it on pace for the largest annual gain since 2007 and beating South Korea’s KOSPI, which has risen 53%. Allan Gray Ltd., which manages $29 billion in assets, says the Nigerian rally is broader than the AI‑driven surge in Korea. Kamal Govan, portfolio manager of the firm’s $604 million Africa ex‑South Africa Equity Fund, notes that Nigerian stocks now make up almost one‑third of the fund, which itself is up 28% this year. The fund also holds positions in Egypt, Zimbabwe, Kenya, Malawi and a few developed markets. Govan contrasts the two markets: the Korean rally is “narrow and thematic”, centred on Samsung Electronics and SK Hynix, together accounting for nearly half of the KOSPI, while Nigeria’s rise spans banks, oil and gas, telecommunications and industrial goods and rests on broader fundamentals. A steadier naira, which has appreciated up to 8% against the dollar, is another support, ranking as Africa’s second‑best‑performing currency per Bloomberg. Seplat Energy Plc, the fund’s largest Nigeria oil‑gas holding, has surged 175% in dollar terms, placing it among the top 13 performers on the 151‑member index. The recent upgrade of Nigeria to frontier‑market status by FTSE Russell could attract more foreign investors and boost liquidity. Allan Gray warns that such strong performance may not be sustainable over the long term.

Context

Frontier‑market status means a country’s equity market meets basic standards of transparency and accessibility, encouraging global fund inflows. Nigeria’s large oil output and a more stable naira have helped broaden investor interest beyond a single sector.