A Nigeria country-specific exchange traded fund led the charge on Tuesday as local investors jumped into riskier assets in response to depressed yields on government debt following the surprise September rate cut.

Among the best performing non-leveraged ETFs of Tuesday, the Global X Nigeria Index ETF (NYSArca: NGE) was up 3.2% on close to two times its daily average volume, briefly crossing over its long-term resistance at the 200-day simple moving average.

Nigerian stocks jumped by the most in over five years, extending a 12-day rally, as local investors turned to equities in search of an alternative source of yield, Bloomberg reports.

For example, NGE offers a 6.78% 30-day SEC yield.

“Yields are very low in the fixed income market — the 30-year bond closed below 9% at the last auction and some blue-chip companies are trading at a 15% dividend yield, so people are going to rotate into equities once again,” Omotola Abimbola of Chapel Hill Denham told Bloomberg.

The Nigerian Stock Exchange All Share Index climbed close to 5% in Lagos, its biggest single day surge since April 2015, and the benchmark has rallied 13% in the past month and it has enjoyed its longest winning streak since July 2017.

The African nation’s stock market has enjoyed a sharp advance after a surprise September interest rate cut that was aimed at stimulating a country still suffering the onslaught of the coronavirus pandemic. Additionally, the more attractive dividend yields also helped further add to the hype.

“The low yield environment has directed some local institutional investors’ participation in the market, further aided by the relatively good corporate results and attractive valuations from some companies,” Lilian Olubi, chief executive officer of EFG Hermes Nigeria, told Bloomberg.

Gbolahan Ologunro, an analyst at CSL Stockbrokers, also pointed out that the fragile state of the economy has pushed investors toward stocks that have demonstrated resilience in light of the ongoing Covid-19 pandemic.

“That is why the rally is not broad-based — few names across sectors have benefited from the rally,” Ologunro told Bloomberg. This “trend is different from what is expected whenever the market is bullish.”

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