Gabon coup hits European markets with declining bonds, shares

Following a military coup in Gabon, the country’s international bonds experienced a significant drop, marking the largest decline on record. Additionally, shares of European companies that operate in Gabon faced a sharp decline.

The turmoil in the country’s political landscape has led to concerns among investors, particularly those interested in Gabon’s oil sector and conservation projects.

As European trading commenced, the dollar bonds due in 2025 and 2031 issued by Gabon experienced a sharp decline in market value, losing approximately 10 percent. These bonds recorded the most substantial drops among bonds from other emerging-market counterparts.

Additionally, European companies with operations in Gabon, such as mining group Eramet SA, oil-and-gas producer Maurel & Prom, and a listed unit of TotalEnergies SE, faced notable declines in their share prices in Paris, accompanied by increased trading volumes.

Eramet, a company engaged in manganese production in Gabon, experienced a significant decline of 19% in its share value. The trading volume during this period was about 15 times higher than the 30-day average for the same time of day.

Maurel & Prom, a company that recently announced a $730 million deal to acquire Gabonese firm Assala Energy, witnessed a sharp decline of 20% in its share value. However, the company expressed confidence in the deal’s outcome and stated that its production activities in Gabon remained unaffected.

TotalEnergies, a long-standing player in Gabon’s energy sector, saw its listed unit Total Energies EP Gabon experience a 15% drop in its share price. Similarly, Panoro Energy, which is engaged in oil production in Gabon, recorded a 5.4% decline in its share value.

These market reactions underscore the apprehensions and uncertainties introduced by the political situation in Gabon, impacting both ongoing operations and investment decisions in the country.

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