Doubt over transparency of presidential election may dampen foreign investors’ confidence -Operators
Some market operators have said that the reports about the international election observers unanimously faulting the transparency and credibility of Nigeria’s recently concluded presidential election will send a wrong signal to foreign investors and further lower their appetite in the local bourse.
The operators stated this during separate chats with the Nairametrics in reaction to the outcome of the presidential election which took place on February 25. According to them, the election fell short of the expectation of the majority of Nigerians and the international community, thus triggering lamentations across the length and breadth of the country.
Already the local bourse halted its five-day winning streak, yesterday, following the declaration of APC’s candidate Bola Ahmed Tinubu as the President-elect. As Nairametrics reported, the benchmark index shed 0.53% to close at 55,508.61 points.
Questions about the election: They said investors are on the sideline with expectations that the results of Nigeria’s presidential election may erupt in chaos as many believed the outcome of the election that saw the emergence of Bola Tinubu came short of expectation.
One of the major opposition parties, Labour Party has said that it will challenge INEC’s decision which declared Tinubu as the winner of the election.
The Vice Presidential candidate, Mr Datti Ahmed, noted that the result did not meet the minimum standard for a transparent free and fair election, adding that the election violated INEC conducts and guidelines, the electoral act and the constitution.
Market performance: Sell pressure in telco giant, Airtel Africa lost -5.25% alongside Lafarge Africa with a loss 0f -1.46% boosted the market’s weak performance despite gains in BUA Foods which gained +5.56%, Zenith Bank with a gain of +0.57% and GTCO which grew by +0.94%.
Consequently, the year-to-date (YTD) return fell to 8.31%, while market capitalization lost N162.15 billion to close at N30.24 trillion.
Further analysis of the day’s market activities showed trade turnover settled higher relative to the previous session, with the value of transactions up by 49.77%.
A total of 565.82 million shares valued at N6.58 billion were exchanged in 4,340 deals. Transcorp with a gain of +2.99% led the volume chart with 47.89 million units traded while GTCO with a +0.94% gain led the value chart in deals worth N1.26 billion.
What market operators are saying: Mr David Adonri, Executive Vice Chairman of Hicap Securities Limited, said the results of the election triggered lamentation all across Nigeria and the local bourse is not exempted.
“For years Nigeria has been subjected to hardship and economic torture, hoping that the hour of liberation has come. The turnout of the presidential election was like a slave convinced that is time to be liberated but instead of getting freedom was taken back into slavery.
“The market is driven by confidence, if the investors suspect that an event that has happened now can adversely affect the future prospect of the market, investors will react appropriately. So as a result of alleged fraud trailing the announcement of the winner of the presidential election, investors’ confidence has been badly damaged to the point of causing a negative reaction in the equity prices today,” he said.
On what the development means to foreign investors, Adonri said that considering the reports of the foreign observers who unanimously faulted the transparency and credibility of the presidential election, foreign investors are likely to rely on the damaging reports to lose confidence in the market.
The National Coordinator, of the Independent Shareholders Association of Nigeria (ISAN), Mr Moses Igbrude said investors are apprehensive and reacting that there might be protests trailing reports of the presidential election in which the outcome was not to the expectation of the majority of Nigerians.
“I believe the market will bounce back in the near term if Nigerians remain peaceful and law-abiding over the development,” he said.
On foreign investors, Igbrude said: “It depends on the policy of the new government, if they fashion out friendly policy, foreign investors will return to the market but if otherwise, they will remain on the sideline. For the foreign investors to return to the market, the new government should ensure stability to the economy and create an enabling environment for business”.
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Full Story: https://nairametrics.com/2023/03/02/doubt-over-transparency-of-presidential-election-may-dampen-foreign-investors-confidence-operators/
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