Nigeria’s benchmark stock index dropped 0.7 percent Tuesday, the most in a week, as election results showed President Muhammadu Buhari building a lead over his main opponent and investor favorite Atiku Abubakar.
“People are just reacting to Buhari leading the results,” said Olabisi Ayodeji, an analyst at Exotix Capital. “Investors’ preference would have been for an Atiku win, considering that he is perceived to be more market friendly, and also seen as having the potential to deliver a stronger economy.”
Money managers and banks including AllianceBernstein LP and Citigroup Inc. have said Nigeria’s stock market may rally if Buhari loses. The incumbent is leading by a margin of 53 percent to Atiku’s 43 percent of the votes collated by the Independent National Electoral Commission in Abuja. The country’s main stock index has dropped almost 49 percent in dollar terms since May 2015, when Buhari was elected president.
The main opposition’s complaints that the election results are being manipulated creates uncertainty, which is damping market sentiment, said Paul Clark, a money manager at Rand Merchant Bank’s Ashburton Investments in Johannesburg.
“There is no reason for the market to rally at all; it does certainly look like Buhari would win -- at this stage,” Clark said. “The one benefit of a Buhari win is business as usual and everything goes on as it was.”