The dramatic and unexpected postponement of Nigeria’s highly-contested presidential election had quite the ripple effect on the country’s economy.
This is because while some investors are understandably happy due to considerable appreciation in the values of their interests, others are sad.
According to Reuters, Eurobond yields in Nigeria rose on Monday following the postponement of the presidential election which was initially scheduled to hold last Saturday.
According to the report, longer-dated and dollar-denominated bonds were the ones that experienced the most rise in yields.
“Nigeria’s Eurobond yields rose on Monday after the country’s surprise decision to delay national elections over the weekend, just hours before polls had been due to open.
The rise in government bond yields — yields move inverse to a bond’s price — was more pronounced in longer-dated, dollar-denominated bonds such the 2027 and 2032 issues.”
Meanwhile, some investors are counting their losses
The election postponement was said to have rattled investors on the Nigerian Stock Exchange (NSE), causing stocks to decline drastically during early trades on Monday. While some of the NSE’s most liquid banking stocks eased by 1.07%, oil stocks declined by as much as 1.44%.
“Nigeria’s main equities index dropped 1.6 percent by close in Lagos, the commercial capital. Nigerian Breweries Plc, a subsidiary of Heineken NV, weakened 10 percent, its largest loss in four years. Yields on the government’s $1.5 billion Eurobond maturing in November 2027 rose 8 basis points to 7.2 percent. Nigerian assets had rallied since the end of January on the expectation of a smooth election.”
As we reported earlier, the All Share Index ended yesterday’s trading session at 32,190.07 basis points, down 1.61%. Year to date, the index is down 2.4%, essentially shedding.
In a related development, the Nigerian naira exchanged at the rate of N401 per dollar, contrasting with the N397 exchange rate that was previously recorded.
“The one-year non-deliverable naira forward opened at a quote of 401 per dollar, compared with 397 in the previous session. Stocks dropped 2.51 percent to a one-week low. They had climbed past a three-month high on Friday.”
The rescheduled election will now hold this Saturday
Recall that the Independent National Electoral Commission, INEC, blamed logistical problems for the last minute postponement of the election. Expectedly, the development drew wide-spread condemnation from virtually all the stakeholders involved in the process.
But the election is now expected to hold this coming Saturday, provided the electoral umpire does not pull another drama on everyone.