Nigerian stocks gain this week after Buhari signals technocratic cabinet

Nigerian stocks rose the most this week in four months as cheap equity valuations enticed investors and President Muhammadu Buhari’s choice of the man to run the state oil company soothed some concerns over who he will appoint to his cabinet.

The Nigerian Stock Exchange All Share Index rose 4.2% over the past five days, the most since the week ended April 3. It’s the best performance among 93 primary indexes tracked by Bloomberg after the main equity gauge of Cyprus.

An economy reeling from Brent crude prices that have more than halved over the past year and Buhari’s delays with naming ministers since taking office at the end of May have sent valuations on Nigerian equities to the lowest in Africa after Zimbabwe.

The appointment this week of Emmanuel Ibe Kachikwu as managing director of Nigerian National Petroleum Corp. is an encouraging sign, according to Chapel Hill Denham Securities Ltd.

“It’s a positive factor, sending a signal that Buhari’s cabinet will comprise technocrats and people with the required qualities,” Tajudeen Ibrahim, head of equity research at the Lagos-based brokerage, said by phones. “Lower prices were also a major drive in the first four days of the week.”

Shares in Africa’s biggest oil producer and economy are trading at 7.8 times estimated earnings, compared with 6.9 times for Zimbabwe’s Industrial Index, 10 times for Kenya’s main gauge and 16 for South Africa’s FTSE/JSE Africa All Share Index.

Evans Medical Plc, which makes pharmaceutical products, rose 39 percent this week, the most among 181 stocks.

Dangote Cement Plc, which makes up 28% of the index’s $55 billion market value, rose 5.9%, the most since the week ending April 3. It is still down 9.5% this year.