Nigeria’s US Dollar Bonds Yield Rises to 9.60% over Selloffs
Nigerian US dollar bonds yield rose slightly to 9.60% due to the latest selloffs by foreign portfolio investors conducting trades in the Eurobonds market. The uncertainties in the local economy and rising debts reduced appetite for Nigeria’s sovereign Eurobond, including expectation that inflation would continue to make an uptrend for the rest of the year.
After two months of deceleration, Nigeria’s inflation reversed trend in Sept due to increased energy costs in the economy. The authority is also asking World Bank to disburse $750 million which was part of broader loan of $2.25 billion that was recently approved.
The naira has been falling for free despite rising external reserves, which cast doubt on actually net FX balance available to the authority after various FX reserves backed covenanted deal.
In Nigeria’s sovereign Eurobonds market on Monday, sell pressure across the short, mid, and long ends of the yield curve resulted in a 2 basis point increase, leading to an average yield of 9.60%.
The Eurobond market began the week on a bearish note, with substantial selling pressure observed in African sovereign bonds, particularly those from Angola and Nigeria.
This trend was primarily influenced by a significant drop in oil futures. However, some buying activity was noted in the Egyptian bonds. Overall, the average mid-yield for Nigerian bonds climbed.
Analysts said they expect the same sentiment to persist on Tuesday, although with a slightly reduced intensity. # Nigeria US Dollar Bonds Yield Rises to 9.60% over Sell Pressure Naira Rises against US Dollar Ahead of Sept. FX Auction
