Nigeria’s US Dollar Bond Yield Dips by 46bps
The average yield on Nigerian US dollar bonds declined by 46 basis points (bps) on the back of an improved sentiment in the international market amidst global market uncertainties.
Foreign portfolio investors’ interest in Nigeria’s sovereign Eurobond increased, with buying interest across the curve, thus reducing the country external borrowing costs.
Investment experts said African Eurobonds rallied decisively after President Trump’s dual reassurances – first declaring he had ‘no intention’ of dismissing Fed Chair Powell, then signalling potential tariff reductions on Chinese imports.
These comments alleviated concerns about central bank independence and trade policy stability, providing much-needed relief to investors rattled by months of market volatility.
Hence, Nigeria’s sovereign Eurobond market rallied on the day, driven by robust investor demand across short-, mid-, and long-term maturities. The market had been rattled by tariffs, competition, and increased demand for safe haven assets.
Notably, the September 2028 instrument witnessed significant buying pressure. Consequently, the average yield declined by 46 basis points to 10.18%, reflecting increased market optimism and rising bond prices.
The Eurobond market had opened the week on a mixed note, with bulls and bears vying for dominance on Tuesday. Modest buying interest emerged at the short- to mid-segments, while profit-taking activities weighed on the long end.
Notably, the Nov-27 and Jun-31 papers saw price increases, closing at 93.75/94.50 and 94/95, respectively, up from 93.25/94.25 and 93.50/94.75 in the previous session. Conversely, the Dec-34 and Nov-47 papers declined, closing at 95.50/96.50 and 71.75/73.00, down from 95.75/97.00 and 71.875/73.375.
The local bond market continued its quiet tone as most participants stayed out of the action. The limited trading that did occur concentrated on two tenors—February 2031 and June 2053 maturities—with the broader market seeing little flow. By session close, the average mid-yield had drifted 2 bps lower to settle at 18.78%, according to AIICO Capital Limited.Pension Fund Assets Grows to N23.366 Trillion
