(Bloomberg) — Nigerian bonds rose to the highest in almost
four months, while the country’s stocks were poised to extend
gains, after former military ruler Muhammadu Buhari defeated
President Goodluck Jonathan in a largely peaceful vote.

The African nation’s $500 million of Eurobonds due in July
2023 advanced for the 11th day, pushing the yield down 19 basis
points to 6.01 percent by 8:46 a.m. in Lagos. The Nigerian Stock
Exchange All Share Index jumped 2.1 percent on Tuesday, its
longest winning streak in more than a month, amid speculation
the leadership transition won’t be fraught with violence.

“We’re actually going to see the market go up” with a
Buhari victory, Sven Richter, who oversees more than $260
million as the Johannesburg-based head of frontier markets at
Renaissance Asset Management, said by phone on Tuesday. “The
market’s been waiting to see a free and trouble-free election.”

Jonathan, who lost in the first defeat of an incumbent
since Nigeria gained independence from the U.K. in 1960, sent
his “best wishes” to Buhari after the vote, bolstering
investor confidence as the country contends with a six-year-old
war against the Islamist militant group Boko Haram. Nigerian
equities trade at 8.7 times projected 12-month earnings,
compared with a multiple of 10 for the MSCI Frontier Markets
Index.

“The Nigerian equity market is cheap and part of this
cheapness is because the risk premium is high,” Ayodele Salami,
the chief investment officer at Duet Asset Management Ltd. in
London, said by phone on Tuesday. “The absence of post-election
violence will probably give a lot of investors at least some
more confidence to start coming back to Nigeria.”

A retired general who lost three previous elections, Buhari
pledged on the campaign trail to clamp down on corruption, boost
average annual growth to 10 percent and create at least 1
million jobs a year. He won 52.4 percent of votes cast in all 36
states and the Federal Capital Territory in Africa’s biggest oil
producer, according to tallies by the electoral authorities.

To contact the reporters on this story:
Maria Levitov in London at
mlevitov@bloomberg.net;
Paul Wallace in Lagos at
pwallace25@bloomberg.net

To contact the editors responsible for this story:
Daliah Merzaban at
dmerzaban@bloomberg.net;
Vernon Wessels at
vwessels@bloomberg.net
Stephen Kirkland