(Bloomberg) -- Mozambique’s US dollar bonds due in September 2031 dropped for a fifth day, the longest selloff since April, after the opposition leader called for a “revolution,” threatening to escalate political unrest as election results are released Thursday.
The bonds fell 1.987 cents on the dollar to 83.917, pushing the yield to nearly 13% and putting them among the worst performers in emerging markets during the trading session.
Political tensions have increased since the October 9 election, with police on Monday using tear gas to disperse demonstrations that followed the weekend murder of a lawyer who represents Venâncio Mondlane, an independent presidential candidate who claims he won the vote.
The country’s electoral commission is releasing election results Thursday, though the official winner hasn’t been declared yet. Mondlane claims to have won the presidency despite provisional tallies showing the ruling party’s Daniel Chapo well ahead. He’s called on supporters to paralyze the entire nation on Thursday and Friday to protest what he called a fraudulent election.
“I think it could well extend losses should political unrest continue, as all of this sends negative signal to possible investors regarding stability within country,” said Thys Louw, a portfolio manager at Ninety One UK Ltd. “Market will ask questions about what this means for oil-and-gas investment should it continue.”
One of the world’s least-developed nations, Mozambique has already been rocked by a corruption scandal and repeated tropical cyclones that have taken a toll on the economy.
The government is also still battling an Islamic State-linked insurgency in the northern Cabo Delgado province. The fighting has stretched the military and prompted TotalEnergies SE and Exxon Mobil Corp. to delay massive gas projects.
“Election unrest in Mozambique can only mean one thing for the country’s planned gas energy infrastructure: namely delays,” said Florence Schmit, a European energy strategist at Rabobank. “The restarting of TotalEnergies Mozambique LNG project hinges on a smooth presidential transition.”
©2024 Bloomberg L.P.