(Bloomberg) – The Lagos shares have extended their winning streak to the maximum since July 2017 before the election this weekend, as investors strengthen their bet on a satisfactory market outcome.

The Nigerian Stock Exchange's Main-Board benchmark rose 2.1% on Tuesday, its best performance this year, recording its eighth straight day of record highs, reaching its highest level in nearly four months. Dangote Flour Plc Mills, Jaiz Bank Plc, Plc Livestock Feeds and NPF Microfinance Bank Plc all increased the daily limit by 10%.

The Feb. 16 vote announces it as a tight struggle between the two most powerful candidates: President Muhammadu Buhari and Atiku Abubakar, a successful businessman and former vice president who promises to carry out a more political favorable to the market. Investors may be preparing to win Atiku, said Olabisi Ayodeji, an analyst at Exotix Capital.

According to foreign investors, Abubakar offers better prospects for improving the management of an economy that rivals South Africa and is the largest on the continent, said Ayodeji. "If Atiku wins, the market should perform better after the elections." On the other hand, a Buhari victory could lead to a negative reaction of the actions, she said.

Analysts at Citigroup Inc. also said that the Nigerian stock market could recover if Buhari is lost. The outgoing president has not kept his promises to rejuvenate and diversify the oil-dependent economy and has had mixed success in repressing endemic corruption in four years. Abubakar is committed to privatizing state assets and launching the naira, but has been accused of corruption, which he denied.

Even after their recent gains, Nigerian equities are trading at lower valuations than their counterparts in the Frontier Markets: 7.6 times the estimated earnings, compared with more than 11 times for the MSCI Frontier Markets Index. But, as a technical sign that the stock market benchmark may have risen too rapidly, its 14-day relative strength index closed above 70 on Tuesday, ending in "overbought" territory for the first time since more than 40 years ago. ;a year.

"The gains will probably be maintained until the weekend," Ayodeji told Exotix. "What we will see after will depend on the outcome of the elections."

To contact the reporter about this story: Tope Alake in Lagos at talake@bloomberg.net

To contact the editors in charge of this story: Sophie Mongalvy at smongalvy@bloomberg.net, John Viljoen, Kasper Viita, Karl Maier

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