Falling stocks
On Wednesday morning, INEC (Independent National Electoral Commission) announced the results of what we can call the most anticipated presidential election that took place on the 25th of February, 2023. Most young Nigerians had showed support for the candidate of the Labour Party (LP), Peter Obi. However, the winner was declared as Bola Ahmed Tinubu of the All Progressive Congress party (APC).
There are several claims of electoral malpractice and it is believed that the electoral results do not reflect the voice of most Nigerians. Labour party has also announced its intention to challenge the decision made by INEC in court.
Prior to the election results, we saw the Nigerian stocks gain as investors anticipated the 2022 full-year dividend payout and hoped that the election results wouldn’t throw the country into unimaginable crisis. After the emergence of Bola Ahmed Tinubu as the president-elect, the Nigerian stocks fell bringing the five day gaining streak to an end. The Nigerian All Share Index (ASI) fell by 0.53% with most stocks neither gaining nor loosing.
The country’s present economic crisis is at the heart of the ongoing debate and places high level of significance on the next presidential office. The high exchange, inflation and interest rates as well as reduction in the country’s foreign reserves, slowed economic growth and oil output issues were part of the factors that led to the downgrade of Nigeria’s rating by Moody’s. The country now faces pressure on its borrowing capabilities and the next policies implemented would be crucial to defining the fate of the economy.
So what?
Although the stocks are still up by 8.8% YTD driven by the positive performance of the months of January and February, investors have more uncertainty going into the month of March as they await the state elections and the actions of Labour Party and People’s Democratic Party (PDP) regarding challenging the presidential election results.
As news of Tinubu’s victory spread, the market and the people are concerned about his economic policies and the potential impact on the economy. With the uncertainty in place, investors are likely to keep a close eye on upcoming developments both in the economic space and the political one.