Business
S&P Dow Jones places Nigeria on 2027 Frontier Market Watchlist
By Peter Egwuatu & Yinka Kolawole
Nigeria’s capital market has received a significant boost after S&P Dow Jones Indices (S&P DJI) placed the country on its 2027 Country Classification Watchlist for potential reclassification from a Standalone Market to a Frontier Market, citing improvements in the country’s regulatory environment and market integrity.
This is even as Bloomberg ranked Nigerian stock market as the world’ best performing stocks, overtaking that of South Korea.
The decision, announced in S&P DJI’s annual Country Classification Watchlist, positions Nigeria among markets under formal review for a possible change in classification next year.
While the announcement does not constitute an immediate upgrade, it signals that the country’s recent regulatory and structural reforms are gaining recognition from one of the world’s leading index providers.
In its assessment, S&P DJI said: “The Nigerian regulatory environment has modernized to improve transparency, enforcement, and market integrity,” adding that consistent policy implementation and operational resilience will be critical in determining whether Nigeria qualifies for Frontier Market classification during the 2027 review.
The development comes as Nigeria’s capital market continues to implement wide-ranging reforms led by the Securities and Exchange Commission (SEC), in collaboration with Nigerian Exchange Group (NGX Group), Central Securities Clearing System (CSCS) and other market stakeholders. These reforms have focused on strengthening investor protection, enhancing market transparency, improving operational efficiency, modernising post-trade infrastructure and aligning Nigeria’s market with international standards.
According to the Director-General of the Securities and Exchange Commission (SEC), Dr. Emomotimi Agama, the Commission’s reform agenda is focused on building a forward-looking market structure capable of supporting intelligent investing through faster settlement systems, tokenised securities and deeper derivatives markets.
“At SEC, our priority is to sustain a fair, orderly and transparent market that protects investors and supports long-term capital formation,” Agama added. Commenting on the development, Group Managing Director and Chief Executive Officer of NGX Group, Temi Popoola, said the announcement reinforces growing international confidence in the direction of Nigeria’s capital market reforms.
“This is an encouraging development for Nigeria’s capital market and an acknowledgement of the collective efforts of regulators, market infrastructure institutions and market operators to build a more transparent, efficient and globally competitive marketplace,” he stated.
Meanwhile, Nigerian equities have overtaken South Korea’s stock market to become the world’s best-performing equity market in dollar terms this year, buoyed by macroeconomic reforms, improved foreign exchange liquidity and renewed investor confidence.
According to a Bloomberg report yesterday, Nigeria’s benchmark stock index has returned 67 percent in dollar terms since the beginning of the year. The performance edged South Korea’s Kospi index, which has gained 66 percent, among the 92 global stock exchanges tracked by the publication.
The report said South Korea lost its lead after the Kospi slipped into a technical bear market this week, falling 22 percent from its June 19 peak as investors reassessed the outlook for artificial intelligence (AI)-related stocks.
According to the publication, financial services companies listed on the Nigerian Exchange (NGX) have driven much of the market’s gains, with Fortis Global Insurance Plc delivering a return of about 1,400 percent in dollar terms this year. Also, unlike South Korea’s equity market, where technology and AI-related stocks dominate, Nigeria’s rally has been driven largely by domestic macroeconomic factors.
