FPIs Show Preference for Nigeria’s Jul-2023 Eurobond
With uncertainties in the global market, foreign portfolio investors (FPIs) took positions on the 6.375% Jul-2023 Federal Government of Nigeria Eurobond to optimise returns amidst interest rate hikes.
The increased demand for the instrument pushed the market price to USD99.220 according to data from the debt office. At the current market price, the short duration has an associate yield of 8.064%.
In a note, analysts said foreign portfolio investors traded the Nigerian curve with improved sentiment, as bids trickled in selected securities across the benchmark curve.
Particularly, the Jul-2023 maturity was most preferred, while Jan-2021, Feb-2032, and Nov-2047 maturities supported the bullish charge.
TrustBanc Capital told investors that as a result of the bullish momentum, the average benchmark yield cleared 3bps lower to 13.17% while the 10-year US treasury yield closed at 3.50%.
Last week, the yield curve shifted both sides intermittently as FPIs digest another quarter percentage raise by the US Federal Reserve and Bank of England.
The 2023 Eurobond yield closed the week at 7.717% as the price fell to $99.303, according to data obtained from the Bloomberg platform by Debt Management Office.
Asset and fund managers played heavily in the international debt capital market while some local investors show a preference for US Dollar denominated assets to cover their naira assets exposures.
Nigerian investors are playing at the Eurobonds market to reduce inflation, and weak local currency pressures on their wealth – especially, the very high net worth individuals” #FPIs Show Preference for Nigeria’s Jul-2023 Eurobond
