Fair Poll Boosts Nigeria Dollar Bond
Nigeria’s 2021 dollar bond stabilised following the National Assembly elections, which
analysts say could set the tone for next weekend’s presidential election. Nigeria’s benchmark
2021 dollar bond had reversed an early 3 point fall to trade marginally above Friday’s close at
around 103, Reuters data showed.
“It’s a foretaste of the presidential election, which is the main thing investors are
looking at,” Stuart Culverhouse, chief economist at Exotix in London, was quoted as
saying, adding “It may suggest the opposition may do better than in past elections … the
size of the overall vote for the ruling candidate may be lower than it has been.”
Investors stressed that the fact that elections had passed smoothly and were being judged as
fair was a positive in itself for Nigeria.
The 2021 bond has been rising steadily in recent weeks as the country benefits from $125 per
barrel oil prices and investor hopes of a smooth election process that will ultimately return
Jonathan to office.
“Investors are looking ahead to next weekend as more pivotal for the credit quality of
the country,” a bond trader in London told Reuters.
Nigeria’s portion of the EMBI Global Diversified sovereign emerging bond index widened
11 basis points to 295 bps over U.S. Treasuries, compared to a 2 bps, tightening for the index
as a whole. It had tightened 30 bps on Friday.
Results declared for a half of the seats in the National Assembly showed the PDP was on
course for a majority, but not of the size which has allowed it such dominance since military
rule ended in 1999.
Jonathan must win an overall majority and at least 25 per cent of the vote in two-thirds of the
36 states to secure a first-round victory. Opposition parties are hoping their regional strengths
can combine to force a run-off.