Perhaps in response to President Muhammadu Buhari declaring his intentions to run for a second term, Nigeria’s financial markets all reacted negatively.
The Nigerian Stock Exchange (NSE) All-Share Index closed at 40, 429.18 basis points, down 1.01%. Year to date gains have since dropped to 5.72%.
Bashir Ahmad, Special Assistant to the President on New Media, broke the news on his twitter handle.
BREAKING: President Muhammadu Buhari has just officially announced his intention to seek re-election in 2019. Details soon…
— Bashir Ahmad (@BashirAhmaad) April 9, 2018
Possible Market reaction?
Nairametrics Founder, @Ugodre tweeted a snapshot of the market chart at the end of trading on Monday.
Looks like Market tanked just after Buhari announced he will run for a second term. 😳😳 pic.twitter.com/tuKcY8q7YC
— Ugo Obi-Chukwu (@ugodre) April 9, 2018
Yields rose marginally on long-dated bonds, while they dropped on treasury bills. Investors usually pile into bonds during times of uncertainty.
The down markets may not necessarily be a reflection of negative sentiments to the President’s candidature but the heightened uncertainty. The President’s declaration in some ways would be the unofficial start of the campaign period. Governance could also take a back seat. The National Assembly is yet to pass the 2018 budget into law.
Approaching elections could also increase socio-political tensions in the Niger Delta which has been largely peaceful.
In the coming days
Investors should pay closer attention to the Investors and exporters window. Heavy traffic there could indicate foreign investors are taking their leave from the country. This could precipitate pressure on the foreign exchange rate.