Investors react to Nigeria's presidential election

Investors around the world are closely monitoring Nigeria's presidential election as current trends indicate a potential victory for APC candidate Bola Metimidu Psinubu. The Chairman of Skymark Partners, Egie Akpata, shed light on the market dynamics during a recent interview on CNBC Africa. The key focus has been on the Eurobond market, with bond prices reacting positively to the unfolding election results. Despite ongoing protests, investors are starting to perceive a sense of stability in the outcome. Akpata highlighted that while some attribute the bond price movement to technical factors and global interest rates, the overall sentiment remains positive due to the potential conclusion of the election without major disruptions. This stability bodes well for foreign investors who often fear uncertainty in such situations. Several of the leading candidates have voiced intentions to renegotiate Nigeria's debts, except for the APC candidate, which has provided confidence to bondholders that terms will remain stable. The market has also witnessed a 7% growth this year, largely driven by local investors. Akpata noted that local sentiment has been positive, with the equity market performance reflecting this optimism. Local investors appear unfazed by the election process and are actively participating in the market. Looking ahead, Akpata highlighted that Nigeria's upcoming bond maturities pose no immediate concerns, given the country's substantial reserves and successful bond auctions. With maturities well-spaced out over the next few years, the next president will have a buffer to navigate these payments comfortably. As for the corporate Eurobond market, Akpata suggested that issuers may wait for possible sovereign credit rating updates before entering the market. The prospect of ratings agencies maintaining or downgrading Nigeria's credit rating could influence corporate bond issuances in the future. Overall, the market sentiment appears cautiously optimistic, awaiting further clarity on the election outcome and its impact on Nigeria's financial landscape.