INEC Chairman, Professor Mahmood Yakubu
Following the shift of the general elections by the Independent National Electoral Commission (INEC), market analysts have said that this may have a negative impact on the confidence of foreign and domestic investors in the nation’s capital market.
The Presidential and National Assembly elections slated for February 16 were shifted till February 23 by the INEC on Saturday, hours to the commencement of the polls while Governorship, state houses of assembly and Federal Capital Territory Area Council polls, earlier fixed for March 2 were also moved to March 9 by INEC due to some challenges.
Also foreign and domestic players played down election risk as the Nigerian equities market sustained its bullish run. Evidently, th All Share Index (ASI) returned a whopping 3.76 per cent w/w – largest weekly gain in 4 weeks – to close at 32,715.20 points.
But with the postponement, analysts are of the opinion that the bears might return to the nation’s bourse.
Chief Executive Officer, Crane Securities, Mike Eze, noted that the postponed election will indirectly shift traders’ sentiment, adding that the bullish run seen by the market in recent weeks to the buildup of the general election may be replaced by some profit taking.
“The market is information driven and so there will be a mixed reaction on the trading floor this week as it will not be as bullish as the previous week especially Friday. This is because Friday was the eve of the supposed election and people were expecting a positive result that will also affect the market positively but now they have shifted the election which indirectly have shifted traders’ sentiments the bears will come to the fore come Monday”, he said.
Chief Executive Officer, Sofunix Investment, Sola Oni, described the sudden postponement few hours to election period as a sad commentary, adding that it has deepened Nigeria’s political risk with dire consequences on investment decision.
According to him, the shock caused by the announcement may jolt foreign portfolio investors who have been apprehensive of the presidential election.
“It is not unlikely that trading on the stock may be moderated by this development as it is capable of further eroding investor confidence in our market. Every political decision has direct or indirect impact on the financial market. I think the time has come for our leaders to stop making Nigeria a laughing stock before the international community” Oni said.
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