Time to “buy the dogs” in Nigeria? Our friend, long-time subscriber and far-flung correspondent Jonathan Auerbach thinks so, with an emphasis on banks and brewers. You can reach him at Auerbach Grayson, 212 453-3575. Here’s a note from him that accompanied the firm’s most recent report on Nigeria:
From various sources we have heard that Nigerian President Yar’Adua has died; however there is no official confirmation but in fact Vice President Goodluck Jonathan has been administering the country for almost 2 months during Yar’Adua’s prolonged illness and absence. Nigeria was one of the worst performing emerging markets last year (buy the dogs?) exacerbated by margin loan problems at a number of major banks which have been dealt with decisively by the Central Bank. While the market has been up 10% in the last week (open the attachment please) we think that any media frenzy over succession, in a country where most pedestrian observers put a full stop after they deal with corruption, oil problems, and assorted chaos, could provoke volatility with a selling bias. Our view (read my notes on Nigeria from my visit last month) is that any market price weakness would be an attractive opportunity to add or initiate positions in this remarkable land. Ideas call Zoran or me. The easy calls are the surviving banks and brewers.
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