Buhari’s re-election sends stocks stumbling

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Nigeria’s 10-year bond yield reached its nadir point in six months on Wednesday as stocks dropped after incumbent Muhammadu Buhari was announced winner of last weekend’s Presidential elections.

Buhari, according to the Independent Electoral Commission, obtained 56 percent of votes against 41 for his main rival, businessman and former vice president Atiku Abubakar of the People’s Democratic Party (PDP), and will lead Africa’s biggest economy for another four years.

But Atiku rejected the result and vowed to challenge it in court.

The benchmark 2028 bond yield dropped to 14.3 percent, its lowest since August, from 14.5 percent the previous day. It was quoted at 14.75 percent a day before Saturday’s vote.

Yields on government bonds have been falling since December as investors bought debt. Traders said they had seen some buying from offshore funds on Wednesday.

Nigeria’s dollar-denominated bond traded offshore rose as much as 0.8 cents in the dollar to extend a more than 10 cents rally since the start of the year.

Similarly, stocks fell to a one-week low in early trades on Wednesday. The stock index which opened up 0.12 percent turned red to fall 0.18 percent, its lowest in one-week, on low volumes after mixed trading in the past week due to the election.

Stock analysts had predicted a stock market rally this year if the elections passed without violence or other problems.

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