African Eurobonds Issuers’ Yields Attract Offshore Investors
The average yield on African Eurobonds declined as offshore investors continued to increase their bets in oil-linked issuers in the international market.
Nigeria, Egypt and Angola have continued to offer elevated yields on their US dollar-priced international bonds, a development that keeps foreign investors closer.
The prospect of economic growth and improved fiscal performance was priced into investors’ actions on the top African sovereign eurobonds trading, still offering more than the US rate.
in a report, the World Bank said developing countries’ debt outflows hit the highest level in 50 years as principal and interest payments since 2022 reached $741 billion.
In the market on Thursday, offshore investors reacted positively to lower U.S. weekly jobless claims, which came in below both the previous reading and market expectations.
The market closely watches gains in oil prices and strong bets on a Fed rate cut next week amidst fluctuation in US Treasury yields.
U.S. Treasury yields trade lower, reversing some of Thursday’s increases that were driven by better-than-expected jobless claims data. Friday’s U.S. data focus is on September PCE inflation.
The Fed’s preferred gauge of inflation was delayed by the longest U.S. government shutdown. U.S. Treasury yields decline by 1 bp to 1.5 bps across maturities, with the two-year yield falling 1.2 bps to 3.518% and the 10-year yield declining 1.4 bps to 4.093%
In African space, the yields across major oil-producing economies (Nigeria, Angola and Egypt) declined, leading to price increases across maturities. Investment firms reported that buying interest persisted across the benchmark curve while investors continued to cherry-pick at favourable entry levels.
The average yield on Nigerian Eurobonds dropped further by 6 basis points to 7.11%, indicating strong global investor demand for Nigeria’s dollar-denominated debt securities.
Buying interest surface in Egypt, Angola and Ghana amidst expectation that oil-linked issuer fiscal performance will improve. The market has continued to react to the oil price volatility and expected U.S. PCE data, which will further guide the Fed decision. Naira Value Depreciates as U.S Dollar Supply Tightens
