On Tuesday, the Wall Street investment bank JPMorgan stopped a sharp drop in Nigerian assets. This they did by saying that the risk of trouble in the West African country due to the election may be going down.
This statement was made in response to a report that the risk of trouble in the country was going up.
Furthermore, JPMorgan suggested that investors would profit by taking a long position (non-deliverable future) in the US dollar. And also the Nigerian naira over the next nine months. This in suggested in anticipation that the official exchange rate would fall significantly during that time.
JPMorgan analysts sent a note to their clientele in which they said, “We still expect the currency will decline following the election. Nevertheless, we think the NDF curve on the front has adequately priced this risk.”
