₦airaland Forum

Nigeria Delayed Election Compounds Misery for Stocks, Naira

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It looks like it’s going to get worse for investors in Nigeria before it gets any better.

The country’s stock index is the worst performer in the world this year, while its currency has declined 17 percent in the past six months to an all-time low. Both, along with government bonds, are set to weaken more after Nigeria delayed elections, according to banks and brokers including Renaissance Capital and Standard Chartered Plc.

“We are going to see the market react in a negative way,” Bismarck Rewane, chief executive officer of Financial Derivatives Co., a financial advice company in Lagos, said from the city on Sunday. “The economic uncertainty of the country has increased. By extending the uncertainty, investors who were waiting for the outcome of the election will not come back.”

Nigeria’s electoral commission said at the weekend the presidential and parliamentary election scheduled for Feb. 14 will be put back to March 28 because of attacks by the Islamist Boko Haram group. Government opponents said the move will give President Goodluck Jonathan an extra six weeks to rally support that has been dwindling as a collapse in the price of oil hits the revenue of Africa’s biggest crude exporter.

The value of the 195-member Nigerian Stock Exchange All Share Index, which reached a peak of more than 13 trillion naira ($66 billion) last year, tumbled to 10.2 trillion naira as of 11:37 a.m. in Lagos as crude prices plunged more than 50 percent since June. The index is down 0.4 percent to 29,866.57, a third day of declines.

Naira Slump
The naira has slumped 15 percent against the dollar on the interbank market in the past three months, the most among 24 African countries tracked by Bloomberg. It fell for sixth day, down 1 percent to 195.95, a record low.

“We had expected that after companies release their full-year results in March and the election is over, some stocks will begin to recover,” Ayodeji Ebo, [/b]head of research at Afrinvest West Africa Ltd. in Lagos, said by phone. [b]“The postponement has extended the market uncertainties.”

Support for Jonathan, 57, and his People’s Democratic Party is declining as his administration battles an increasingly powerful Islamist Boko Haram insurgency, making the presidential election the closest since the return to democracy in 1999.

Jonathan has been in power since 2010 after first taking the post following the death of his predecessor and then winning an election a year later.
Boko Haram, which seeks to impose Islamic law in Africa’s biggest economy, killed more than 4,700 people last year, twice the number who died in 2013, according to estimates from U.K.- based risk consultancy Verisk Maplecroft.

Neck and Neck
Jonathan and All Progressives Congress candidate Muhammadu Buhari, the main challenger, are tied at 42 percent among likely voters, the highest level recorded for an opposition candidate since 2000, according to Jan. 27 report by Afrobarometer, a research group funded by the Mo Ibrahim Foundation and the U.S.

Agency for International Development, among others.
The poll of 2,400 adults conducted in December had a margin of error of plus or minus two percentage points.
“The market is likely to remain in a risk-aversion mode this week,” Samir Gadio, the London-based head of Africa strategy at Standard Chartered Plc, said by e-mail.

There’s also a question of managing the economy. [/b]Finance Minister Ngozi Okonjo-Iweala in December proposed cutting this year’s budget by 8 percent and reduced its benchmark oil price to $65 a barrel from last year’s $77.50 because of tumbling crude prices. Lawmakers are still considering the proposals.

[b]“At the macroeconomic level, things will remain at a standstill as lawmakers engaged in politics may not be able to pass the 2015 budget,” Ebo said. “Even the president will have little time to run the economy.”

http://www.bloomberg.com/news/articles/2015-02-09/nigeria-s-delayed-election-compounds-misery-for-stocks-and-naira

SeverusSnape:
That's not a problem, It will be fixed.

LRNZH:
Of course. That's why Baba has not quit politics.
Fixing Nigeria since 1983.
Sai Buhari

joseph1013:
You think the bowler man cares? No he doesn't. He's presently occupied with planning how to remove Jega and disqualify the People's General.

The country can go up in flames for all he cares, as long as he does not hand over to GMB, it's all good to him.

But he miscalculated. His band of criminals are not strategic enough, for Jonathan does not know that it is no longer PDP vs APC, it is now Jonathan vs Nigerians. He thinks he can rape our democracy but he has forgotten that he is not the first to try that nonsense.

Maybe he drinks too much to read about Lauren Gbagbo and how he ended.

We'll not just vote him out for his failure, we'll vote him out because of treason. He is now the Enemy of the State.

I read Soyinka's article and I could almost feel his pains as he concedes to the candidature of Buhari. Who wouldn't, given the precarious nature of the present realities?

Jonathan is a goner!

SeverusSnape:
That old hag!

hahn:
Your brain is on vacay. After everything, you still choose to support this dude. I'm guessing your father or someone in your family is benefitting from this man's cluelessness

bizlifelines:
Appears Nigerian economy is going south south