Saturday, 23 November 2024

Nigerian Assets Rally On Peaceful Election, Rising Oil Prices

It is no secret anymore that the Nigerian Stock Exchange (NSE) is the best performing market in Africa this year. The bourse posted a 9.8 percent growth in April alone, adding to the 21 percent gain made over the last three month. Market analysts have attributed the bull run to a peaceful election on March 28, that saw a sitting president for the first time concede defeat to an opposition candidate. The recovery of oil prices, the country’s main revenue earner has also fuelled the rise in stock prices. “It’s not only Nigeria that performed well during the month. We’ve seen the likes of Ivory Coast posting almost 8 percent during the month … a lot of this has been driven by the recovery of the oil market,” Zack Bezuidenhoudt, head of South Africa and Sub-Saharan Africa at S&P Dow Jones Indices told CNBC Africa. “People cannot ignore the fact that you can get great returns coming out of west Africa,” he added. Nigerian assets have soared after President Goodluck Jonathan conceded defeat to former military ruler Muhammadu Buhari on March 31, quelling investor concerns that Africa’s largest economy could succumb to post election violence between the Muslim North and Christian South. A 40 percent plunge in oil prices and concern over the election had dragged Nigerian stock to one of the world’s worst performance in 2014. The country is the largest oil producer in Africa and relies on revenue generated from selling the commodity to finance 70 percent of its government budget. “The clear, peaceful, and seemingly fair conclusion of Nigeria’s presidential, legislative, and state elections … boosted investor sentiment,” John Ashbourne, an Africa economist at Capital Economics, said in a note quoted by Bloomberg. A reversal in investor flow from the Kenyan market, which benefitted from foreign investors exiting the Nigerian market ahead of what was considered a risky election, saw the NSE gain while the east African market dipped for the first time in 16 weeks. Kenya also suffered an investor confidence blow after terrorist attacked a university in Garrissa on April 2, killing 148 people. - See more at: http://afkinsider.com/95784/nigerian-assets-rally-on-peaceful-election-rising-oil-prices/#sthash.ZNdGKWGx.dpuf

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