Nigerian stocks fall, naira weakens after election delay

The naira weakened on the forward market on Monday and Nigerian stocks fell to a one-week low after the country’s surprise decision to delay national elections over the weekend, hours before polls were due to open.

The electoral commission said the elections were postponed for one week solely for logistical reasons and denied political pressure had played any part. President Muhammadu Buhari and his main rival, former vice president Atiku Abubakar, both urged voters to stay calm.

The one-year non-deliverable naira forward opened at a quote of 401 per dollar, compared with 397 in the previous session.

“There is some frustration on behalf of investors who have had concerns about this election for the better part of the past year and are ultimately hoping to simply put it behind them,” said Christopher Dielmann, senior economist at Exotix Capital

Investors had started to pick up shares to position for a post-election rally, assuming that the election would pass without violence or other problems. That boosted dollar liquidity on the currency market.

Stocks, which had climbed past a three-month high on Friday, shed 1.8% to 32 126 points on Monday.

Analysts say the delay could lead to a contested result, creating uncertainty,

“Some investors might still want to wait for the results of the election to gauge risks, such as a possible contestation of the result, which the postponing arguably now has given more grounds for,” said Cobus de Hart, senior economist at South Africa‘s NKC African Economics.