Nigeria’s stocks and bonds rose on Monday after the conclusion of a presidential election over the weekend lifted a layer of political uncertainty in Africa’s biggest economy, traders said. The electoral body has started to count votes in the closely-fought election that pitted President Muhammadu Buhari against businessman Atiku Abubakar but it is unclear when the winner will be declared.
Stocks rose 0.43 percent to 32,655 points while a rise in bond prices was more pronounced in longer-dated, local currency bonds such as the 2028 issue. Yields on the 10-year paper fell to 14.5 percent on Monday from a previous close of 14.68 percent. No major trades occurred on the naira currency on Monday, traders said, as investors await the result of the vote. But on the forward market, the naira firmed to 396 per dollar, up from 401 posted a week ago.
“Barring any negative surprises at the polls, we anticipate a positive start to this week’s trading as investors price in improved certainty upon conclusion of the general elections,” analysts at Vetiva capital wrote in a note. The election had been scheduled to take place on Feb. 16 but, just hours before it was due to begin; the electoral body postponed it by a week, citing problems in delivering ballot papers and results sheets to some parts of the country.
The head of the African Union observer mission said on Monday that the election had taken place in a generally peaceful environment. But the U.S. observer mission said the week-long delay had damaged public confidence in the process and probably reduced voter turnout.
Nigeria’s dollar-denominated eurobonds shuffled higher as investors waited on the first flurry of regional results. Longer-dated bonds with maturities as far off as 2049 climbed almost 0.5 cents in the dollar and having risen for the last five days running, they had more than made up for the losses suffered a week ago when the election was postponed.
“The market opened on a constructive note … as evidenced by a receiving bias in USD/NGN forwards, supportive local bond performance and moderate gains in Eurobonds,” said Samir Gadio, head of Africa strategy at Standard Chartered Bank.
“The risk-on global backdrop, higher oil prices and prospects of larger portfolio inflows after the election are probably driving this positive market performance.” Reuters