Nigerian Eurobond Yield Attracts Foreign Portfolio Investors, Demand Increases
In Nigeria’s sovereign Eurobonds market, buy pressure at the short, mid and long ends of the yield curve led to a 0.13% decrease in the average yield to 10.03%, investment banking firm Cowry Asset Limited told investors in an emailed note.
The buying sentiment improved following successful $500 million domestic US dollar bond price at 9.75%.
Also supporting investors sentiment is the expectation that inflation rate would maintain downward trend in August. Nigeria’s consumer price index declined to 33.40% in July as a result of based effect impact on the number.
With the increase in fuel price, market analysts have started to reverse projection about inflation direction further down the year.
In August, The Nigerian Eurobonds market was posed with mixed performance.
The month began with relatively high yields which increased to 11.46% in the first week of August, Meristem Securities Limited said in a review note
Analysts noted that as the month progressed, a downward trend began, indicating a growing demand for the Eurobond instruments as the yield fell to 10.55% at the end of the month.
The investment firm stated that the bullish momentum in the Nigerian Eurobond market reflects a shift in market sentiment as investors became more optimistic about Nigeria’s fiscal management.
Also, expectations of easing interest rates in developed markets further bolstered investor’s sentiments, analysts added
Meristem said as global interest rates showed signs of decline, Nigerian Eurobonds became more appealing to investors seeking higher yields compared to those available in advanced markets.
When compared with July, the average yield was bearish as average yields increased to 10.96% from 9.81% in July.
Traders reported that there was increased demand for the FEB-2038, FEB-2030 and NOV-2047 Eurobonds, evinced by price increases to USD80.48, USD90.71 and USD75.63 from USD77.98, USD73.28, USD87.90 in July. #Nigerian Eurobond Yield Attracts Foreign Portfolio Investors, Demand Increases
