African Eurobonds Rally as Foreign Investors Rotate Portfolio
Nigerian US dollar bonds alongside African Eurobonds rallied as foreign investors adjusted their portfolios in reaction to a weak US dollar, unemployment conditions and delayed consumer price index data.
Foreign investors assessed market trends alongside targets to maximise returns, demonstrating interest in oil-related issuers such as Nigeria, while expressing optimistic sentiment towards Angola, Egypt, Ghana, and other countries.
Nigerian sovereign instruments enjoyed a week of positive momentum, according to investment analysts across Broadstreet.
In its note, Cowry Asset said investors repositioned ahead of the maturity of the November 2025 sovereign bond totalling $1.118 billion, a development that further heightened optimism and reinforced demand across the curve.
As a result, average Eurobond yields declined by 14 basis points week-on-week to settle at 7.76%, signalling improved appetite for Nigerian risk in the offshore market.
The pullback in yields was supported by steady macroeconomic signals, increased fiscal stability, and investor expectations of continued policy prudence, fixed income market analysts said. .
The dollar-priced assets market opened the week strong, supported by sustained demand across the curve. By midweek momentum remained firm as investors continued cherry-picking at attractive levels. However, the market closed the week on a softer note as investors locked in gains.
African Eurobonds
African Eurobonds traded with mixed-to-bullish sentiment for most of the week, supported by a weaker USD, softer U.S. jobless claims alongside a higher unemployment rate, AIICO Capital Limited said in a note.
This happened amidst an improved global risk appetite driven by delayed U.S. data releases—particularly the October inflation data—and the resolution of the government shutdown.
The week opened on a positive note as investors positioned ahead of key U.S. economic data following the end of the prolonged shutdown, investment analysts stated.
Sentiment strengthened midweek after a moderation in U.S. jobless claims and softer October consumer price index readings from the U.K. and EU, which reinforced expectations of a possible Fed rate cut in December.
Positive momentum continued after the U.S. unemployment rate rose to 4.4% in September from 4.3% in August, further supporting a risk-on tone.
Consequently, the Nigerian Eurobond market ended the week on a firm footing, with the average benchmark yield easing to 7.76%. Nigerian Eurobond market is expected to trade positively in the near term amidst stable FX reserve and market anticipation of December rate cut Dangote Cement Falls by 10% in Post-Earnings Sell Action
