JOHANNESBURG (Reuters) – Wall Street investment bank JPMorgan closed a key bearish bet on Nigerian assets on Tuesday, saying the risk of potential problems from the west African country’s national elections may be easing.
Traders should take profits on a long trade on U.S. dollar-Nigerian naira 9-month non-deliverable forwards (NDFs) – a trade that bets on the currency’s official rate falling heavily – JPMorgan said.
“While we still expect the currency to weaken post elections, we believe the NDF curve in the front-end has appropriately priced this risk,” JPMorgan analysts said in a note to clients.
The 9-month NDF is currently trading at 612 naira to $1, according to Refinitiv data, compared to the official exchange rate of 460.
Vote tallying is ongoing in Nigeria’s presidential elections, with a Reuters tally of provisional results from 20 out of 36 states putting ruling party candidate Bola Tinubu in the lead.
(Reporting by Rachel Savage, Editing by Marc Jones)
