Buhari’s 100 days in Office: How has the capital market reacted?

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On May 29, President Muhammed Buhari was sworn-in for the second term as the President of the Federal Republic of Nigeria, to some positive cheer of fixed-income investors who expect his second tenure to be similar to that of his first. In this write-up, we take stock of how the capital market has welcomed the President back to the office.

Buhari’s 100 days in Office: How has the capital market reacted?

More than 100 days since Buhari’s resumption and as the initial euphoria around his resumption fizzled out, the overall market sentiment seems underwhelming. For the equity market, foreign investors reacted negatively to the long delay that trailed the announcement/formation of the executive cabinet members as policies such as the implementation of the new minimum wage were left unattended. This was exacerbated by the wave of the global market events – majorly the downturn in crude oil price, below Nigeria’s $6 0.0/b budget benchmark – which left a negative imprint on the Nigerian economy. Also, for the fixed income market, while a high level of demand drove short term rates to near single digit, the volatility in the crude oil market spoked foreign investors.

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Going forward, we expect investors sentiments to remain the same, especially in the absence of any bold policy reforms. Meanwhile, the recent formation of the executive cabinet provides a glimmer of hope for the broader market as the implementation of policies such as the new minimum wage is anticipated to bolster aggregate spending going forward.


United Capital Plc Research

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