(Bloomberg) — It looks like it’s going to get worse for investors in Nigeria before it gets any better.
The country’s stock index is the worst performer in the world this year, while its currency has declined 17 percent in the past six months to an all-time low. Both, along with government bonds, are set to weaken more after Nigeria delayed elections, according to banks and brokers including Renaissance Capital and Standard Chartered Plc.
“We are going to see the market react in a negative way,” Bismarck Rewane, chief executive officer of Financial Derivatives Co., a financial advice company in Lagos, said from the city on Sunday. “The economic uncertainty of the country has increased. By extending the uncertainty, investors who were waiting for the outcome of the election will not come back.”
Nigeria’s electoral commission said at the weekend the presidential and parliamentary election scheduled for Feb. 14 will be put back to March 28 because of attacks by the Islamist Boko Haram group. Government opponents said the move will give President Goodluck Jonathan an extra six weeks to rally support that has been dwindling as a collapse in the price of oil hits the revenue of Africa’s biggest crude exporter.
The value of the 195-member Nigerian Stock Exchange All Share Index, which reached a peak of more than 13 trillion naira ($66 billion) last year, tumbled to 10.2 trillion naira as of 11:37 a.m. in Lagos as crude prices plunged more than 50 percent since June. The index is down 0.4 percent to 29,866.57, a third day of declines.
The naira has slumped 15 percent against the dollar on the interbank market in the past three months, the most among 24 African countries tracked by Bloomberg. It fell for sixth day, down 1 percent to 195.95, a record low.