Nigeria's stock market has emerged as the world's best-performing equity market in dollar terms this year, overtaking South Korea as investors reward the country's improving macroeconomic outlook and ongoing economic reforms.

According to Bloomberg data tracking, 92 global stock exchanges, Nigerian equities have returned 67% in U.S. dollar terms so far this year, narrowly surpassing South Korea's 66% gain. The milestone marks a remarkable turnaround for Africa's largest economy after years of currency volatility and weak investor sentiment.

The rally has been fueled by President Bola Tinubu's economic reforms, stronger foreign exchange liquidity, higher global oil prices, and renewed foreign investor interest. The naira has also strengthened by about 4% against the U.S. dollar since the beginning of the year, amplifying returns for international investors.

Investor confidence received another boost this week after S&P Dow Jones Indices announced it is considering upgrading Nigeria to frontier market status, a move that could attract additional institutional investment into the country's capital markets.

Nigeria's rise comes as South Korea's stock market loses momentum following months of AI-driven gains. The benchmark Kospi Index has fallen into a technical bear market after declining more than 22% from its June peak, as investors question whether the rapid surge in artificial intelligence-related stocks can be sustained.

The South Korean won has also weakened by about 5% this year, making it one of Asia's poorest-performing currencies.

Market participants also see the potential listing of the Dangote Petroleum Refinery as another catalyst for Nigeria's equities market. Africa's richest man, Aliko Dangote, plans to sell about 10% of the refinery through a multi-exchange listing across Africa, a move that could significantly deepen the Nigerian capital market and attract fresh local and foreign investment.

If the current momentum continues, Nigeria's stock market could strengthen its position as one of the world's most attractive destinations for frontier and emerging market investors.