Foreign Investors Dump Nigeria’s Eurobonds as Inflation Increases
Foreign portfolio investors (FPIs) trimmed interest in Nigeria’s Eurobonds as headline inflation surged to 34.60% amidst expectation of a U.S. Federal Reserve rate cut.
The US rate cut expectations have, however, been soft-pedalled by an increase in the consumer price index. Trading on Nigeria’s note commenced on a positive note as FPIs picked up maturities at decent levels, traders said in their separate notes.
But Nigeria’s inflation data triggered risk-off sentiment that drove yields higher. The renewed sell pressure across the short, mid, and long ends of the yield curve drove a 0.03% uptick in the average yield, bringing it to 9.39%
In Egypt, investor interest in Eurobonds was sparked by the parliament’s approval of a €1 billion financing package designed to alleviate economic challenges.
This positive trend followed a rise in December’s economic activity, which has diminished the likelihood of aggressive interest rate cuts by the Federal Reserves.
Analysts said they expect participants to be cautious, even as investors shift focus to US retail sales data. The latest report from the National Bureau of Statistics (NBS) revealed that Nigeria’s inflation rate climbed to 34.6% in November 2024, up from 33.88% in October.
This is a 0.72 percentage point increase and the highest in 28 years. Sell sentiment is expected to persist as investors digest signals from the inflation data. #Foreign Investors Dump Nigeria’s Eurobonds as Inflation Increases Equities Investors Gain N138bn as Lafarge, VFD Group Rally
