Elevated Yield Keeps Foreign Investors Glue to Nigeria’s Eurobonds
Nigeria’s sovereign Eurobond yield eased to 9.4% in the international market on foreign portfolio investors improved sentiment. Bullish sentiment across the Nigerian Eurobonds market, encompassing the short, mid, and long ends of the yield curve, led to a 4-basis-point decline in the average yield, settling at 9.4%.
The Eurobond market began the week subdued due to the Martin Luther King Jr. holiday and the U.S. presidential inauguration, investment firm AIICO Capital Limited said in its note.
The market turned bearish midweek, with selling pressure on Sub-Saharan African bonds, particularly in Nigeria and Angola, as Angola announced plans to raise over $2 billion in Eurobonds.
Sell pressure shifted sentiment across the yield curve, but the market ultimately closed strong as the bull’s regained dominance. Traders said Egyptian bonds, however, saw buying interest initially before profit-taking set in.
By week end, the market rallied on dovish remarks by President Donald Trump, where he indicated a preference against imposing additional tariffs on China, alleviating concerns about trade tensions.
Trump’s dovish remarks boosted global risk appetite, with investors showing interest in higher-yielding assets like SSA Eurobonds, investment analysts explained. Additionally, Trump reiterated his call for lower interest rates, asserting that they would promote economic growth and enhance competitiveness.
U.S. Treasury yields dipped Friday after President Trump criticised the Federal Reserve’s interest rate policies during the World Economic Forum in Davos, urging immediate global rate cuts.
His remarks came ahead of the Jan. 28-29 FOMC meeting, where markets expect no rate changes, per CME Group data. Overall, the average mid-yield of Nigerian Eurobond yields closed flat week-on-week at 9.36%.
The market anticipates cautious approach is anticipated as investors divert their focus toward the first Federal Open Market Committee (FOMC) meeting of the year. #Elevated Yield Keeps Foreign Investors Glue to Nigeria’s Eurobonds Interbank Rates Slow as Remita, FAAC Credits Boost Liquidity
