Oil-Rich Gabon’s Dollar Bonds Rally as Junta Sets Election Date
(Bloomberg) -- Gabon’s sovereign dollar bonds rallied after the oil-rich nation’s junta said it will hold presidential elections on April 12, raising the prospect of a return to civilian rule.
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The transition will come almost two years after Brice Oligui Nguema overthrew President Ali Bongo — within the timeframe pledged by the military rulers to hold a vote.
The OPEC member’s bonds have handed investors 8.2% total returns over the past month, the third-best showing among emerging-market peers on speculation about the upcoming vote. On Thursday, they extended their gains, with notes due February 2031 and November 2031 figuring among the eight best performers in the Bloomberg EM Sovereign Total Return Index.
The West African nation held a referendum in November allowing presidential terms to be extended to seven years from five. The amendment also cleared the path for Nguema to run in the upcoming election.
“Anything that could lead to democracy and better governance would be good for Gabon,” Søren Mørch, head of emerging-market debt at Danske Bank, said earlier this month. “The bonds look very cheap compared to neighboring countries.”
Nguema ousted Bongo on Aug. 30, 2023, hours after he was declared the winner of a contested presidential vote that would have extended his family’s 55-year hold on power. Bongo had governed the oil-rich nation since 2009, succeeding his father, Omar Bongo, who ruled from 1967 until his death in 2009.
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The government will set up an independent, “non-permanent” election body to monitor the vote, according to the statement.
--With assistance from Srinivasan Sivabalan.
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