Emerging Markets have had a strong start to 2019, even as Nigeria continues to miss the rally.
The Nigerian Stock Exchange (NSE) has lost 4.6 percent since the end of 2018, which is the biggest drop globally after Serbia and Romania, according to data compiled by Bloomberg.
Nigeria’s local bonds have returned 0.4 percent in dollar terms, less than the average emerging-market gain of 1.5 percent.
Investors are fretting about tight elections in February, low oil prices and escalating violence in the North East.
The NSE Chief Executive Officer Oscar Onyema said on Monday that the first half of 2019 would probably be volatile.
Blue-chip names have not been spared. The biggest listed company, Dangote Cement Plc, has dropped 5.1 percent this year.
Nigerian Breweries Plc, controlled by Heineken NV, is down 8.8 percent.
President Muhammadu Buhari, 76, is running for re-election on Feb. 16, with his main challenge coming from 72-year-old former Vice President Atiku Abubakar. Tensions have risen ahead of the vote, with Abubakar’s party accusing Buhari’s party of preparing to rig the polls, which it denies.
CSL Research say the stock market will rally after the election, regardless of who wins. “We expect a recovery in the market in the second half of the year as the new administration assumes responsibility of steering the
economy,” CSL analysts including Gloria Fadipe said in a note Monday.
Given “high potential upside in stock prices, we believe it makes sense for dollar-based investors to take positions on a one-year view now,” CSL said. “Albeit, we recognize considerable investor fatigue with Nigeria that could delay a rally.
