Senegal Bonds Extend Rally After Faye Wins Race for Presidency

Colleen Goko
·2 min read
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(Bloomberg) -- Senegal’s bonds rallied for a second day, posting the best performance among sovereign dollar-debt issuers in emerging markets, after Bassirou Diomaye Faye clinched victory in the race for the presidency.

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The price quoted on Senegal’s bonds due in 2048 rose 1.4 cent to 75.88 cents on the dollar by 12:11 p.m. in London, the highest in more than two weeks.

Results released by Senegal’s electoral commission late on Monday showed that with ballots from 90% of polling stations counted, Faye had secured 54% of the vote, compared with 36% for Amadou Ba, the chosen successor of outgoing President Macky Sall.

Investors had been nervous about Faye winning the election because of concerns he’ll change policies implemented by Sall that generated average economic growth of more than 5% over the past decade. Senegal is on the cusp of becoming a major oil and gas producer that may result in growth accelerating to 8% this year — one of the fastest rates in Africa.

“The tone of these messages has shifted in recent days,” Samantha Singh-Jami, Africa strategist at Rand Merchant Bank, said in a Tuesday note, referring to Faye’s campaign pledges. “With Senegal becoming an oil and gas producer, it is expected to be one of Africa’s fastest-growing economies.”

Faye, who was freed from prison less than two weeks ago, said on Monday he’ll devote himself to strengthening state institutions and maintaining friendly relations with Senegal’s partners, while using its natural resources to deliver on the aspirations of its people.

Read more: Senegal’s Faye Vows to Tackle Corruption After ‘Strong Mandate’

While Faye will probably be friendlier toward the neighboring military juntas of Mali, Burkina Faso and Niger, Senegal’s governance is likely to be cleaner than was the case under Sall, François Conradie, a political economist at Oxford Economics, said in a note to clients.

“We do not think Mr. Faye’s team will implement policies radical enough to discourage investment,” Conradie said. “We will watch statements from the new team for indications of what to expect.”

--With assistance from Andras Gergely and Srinivasan Sivabalan.

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