Investors Pour Dollars Into Nigeria's Bonds as Nigerians Await New President

• Investors rushed to buy Nigerian bonds on Monday, February 27, 2023, as Nigeria awaits the announcement of a new president
• The bonds were rated among 10-best performers in emerging markets
• Investor hinge their hope that Bola Tinubu will be declared the winner of the 2023 presidential election and implement economic reforms
• Nigerian bonds saw some of the best gains in developing markets on Monday, February 27, 2023.

According to Bloomberg, five of Nigeria's dollar bonds ranked among the best 10 performers on Monday, February 27, 2023, in Bloomberg's index out of the 71 emerging nations.

On Monday, Nigeria's sovereign risk premium narrowed the most in 2023, JP Morgan Chase & Co said.

TheCable reports that the equity benchmark in Lagos increased to an eight-month high.

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Tinubu's expected victory spurs interest

Experts attributed investors' expectations to the hope that Bola Tinubu, the All Progressives Congress (APC) presidential candidate, will emerge winner of the 2023 presidential election.

The report said that investors believe the APC candidate will implement the much-required reforms.

Analysts believe bargain hunters might spur some gains after the country's bonds fell in the run-up to the elections.

Per the Bloomberg report, Nigeria's bonds due 2047 increased from 1.8 cents on the dollar to 68.8, cutting its yield by 33 basis points to 11.5 per cent.

Bonds rebound massively

However, securities maturing in 2029, 2030, and 2033 rebounded more than two per cent in price.

Nigeria's NGX Index increased for the fourth day to the highest level of an eight-month high, with IBTC Holding Plc accounting for more than half of the gains.

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JP Morgan's gauge of sovereign-risk premium narrowed from 42 basis points to 723, 104 basis points reduction in the past three days.

The measure had balanced above the 1,000 basis point mark until November 3, 2022.

UBA, Zenith, GTB, 6 other Nigerian banks downgraded by Moody’s as fraud reports increased by over 200 per cent

Legit.ng reported that Moody’s Investors Service, an International rating agency, had devalued nine banks in Nigeria following its under review of the country’s rating last week.

The agency downgraded the nine banks from B3 to Caa1, the long term deposit ratings, issuer ratings and the senior unsecured debt ratings, according to a statement by Moody on Tuesday, January 31, 2023.

A Daily Trust report said the New York-based agency stated that the devaluation of the the long term ratings of the banks shows a combination of two reasons - the weakening operating environment, reflected in the agency’s rating of Nigeria’s economy from ‘Very Weak to Very Week+, and the link between country’s creditworthiness from B3 Caa1 and the banks balance sheets based on their holdings of sovereign debt securities.

Source: Legit.ng