Nigerian stocks rose a 10th day to erase losses for 2015 as President Goodluck Jonathan’s concession of defeat to Muhammadu Buhari in elections mitigated the risk of violence in the country, including in oil-producing regions.
The Nigerian Stock Exchange All Share Index extended its longest streak of gains since September 2012. The measure jumped 13 percent in the past two days, following Jonathan’s congratulatory call to Buhari, to lead advances among global equities. The shift marks the first peaceful handover of power since the end of British colonial rule in 1960.
“It’s a post-election bounce,” Kayode Akindele, a partner in Lagos at TIA Capital Management LLP, which oversees about $200 million, said by phone. “A small part of it is pro Buhari’s win. The larger part is down to it being a peaceful transition. Investors were pretty worried. Now, the specter of violence has diminished.”
Jonathan, a 57-year-old Christian, was the first leader to emerge from the southern region that produces almost all of the country’s crude, the source of 70 percent of government revenue and 90 percent of export income. The area was in turmoil between 2006 and 2009 when militants waged an armed campaign for local control of oil. While some former militant commanders threatened to take up arms again if Jonathan lost, the president distanced himself from those calls.
Nigeria’s equity index rose 3.9 percent to 35,728.12 by the close in Lagos, the highest since Nov. 5. The measure was down 16 percent in the year to March 19, before it started the stretch of gains, the second-worst performance among 93 global primary indexes tracked by Bloomberg.
Five stocks rose for every one that fell on Thursday, while 115 were unchanged. GlaxoSmithKline Consumer Nigeria Plc climbed 10 percent, the most in more than a decade, to 51.04 naira. Guaranty Trust Bank Plc, the biggest lender by market value, gained 10 percent to close at a record 31.88 naira.
Jonathan sent his “best wishes” to Buhari, 72, after the vote, bolstering investor confidence as the country contends with a six-year war by the Islamist militant group Boko Haram. Buhari also faces the task of restoring an economy that’s reeling from a 50 percent drop in the price of oil, its main export, since June.
The West African nation’s $500 million of Eurobonds due July 2023 fell the first time in 12 days, ending a record winning streak. Yields rose three basis points, or 0.03 percentage point, to 6.07 percent, after declining 131 basis points in the previous 11 days.
Buhari’s victory “was very well taken by markets with both hard currency spreads and the local yield curve rallying substantially,” Marcin Adamczyk, who helps oversee about $6 billion of debt at ING Investment Management BV in The Hague, said in e-mailed comments. “Beyond this initial reaction, however, the situation is still fairly complicated. Little is known yet on how the incoming president aims to adjust the economy and implement the structural reform.”