Nigeria's national index and currency rise on Buhari's election win

Nigeria’s national stock index rallied on Wednesday and its currency rose as investors responded favourably to the presidential election win for former military leader Muhammadu Buhari.

Buhari, a 72-year old veteran beat former Nigerian president Goodluck Jonathan in a first in history election in which an incumbent premier has been beaten at the polls.

The change of powers in Nigeria propelled the country’s stock index higher by as much as 6.8% in the session to trade at 33,888.19, its highest level since early January. The Nigeria naira also rose against the US dollar, up 0.12% to change hands at 199.05 per USD.

Fixed income markets responded well to Buhari’s win. The yield on Nigeria’s 2021 eurobond fell by almost 20 basis points on Tuesday, dropping to its lowest level so far this year.

The market response has been one of optimism that Buhari’s win seeds the evolution of democracy in the country after former premier Jonathan’s tenure was dented by scandal and corruption.

Buhari now faces the challenges of both managing an unprecedented – and potentially explosive – transition of power, said John Ashbourne, economist with Capital Economics.

Buhari also must concoct “a policy response to lower oil prices, which have battered Nigeria’s economy and hit government revenues,” added Ashbourne.