Foreign Investors Hunt after Nigeria’s Eurobonds, Yields Ease
Reversing the previous fast and furious sell-down, foreign portfolio investors (FPIs) hunted for Nigeria’s Eurobonds in the international market as uncertainties that ushered in offshore asset rotations eased.
In the week, bullish sentiment returned to the African Eurobond market, driven by stronger commodity prices and dovish signals from global central banks, which eased fears of monetary tightening, analysts at AIICO Capital Limited said.
For most of the week, Nigerian Eurobonds rallied, with yields declining steadily through the week—from 10.85% to 10.67%—before settling at 10.40%, marking a 101 basis points week-on-week compression.
Investment analysts reported that buying interest was prominent in Nigerian, Angolan, and Egyptian papers, although Egypt experienced brief selling pressure midweek due to fiscal concerns.
Market sentiment was also influenced by geopolitical headlines, including comments from U.S. President Donald Trump suggesting a potential shake-up at the Federal Reserve.
Given the latest direction in the Eurobond markets, analysts said trading activities and market conditions are likely to stay volatile as tariff concerns continue to weigh on investor sentiment
Trading activities were seen in the Jan-31 and Feb-32 papers, which saw significant price increases, closing at bid/offer quotes of 91.625/92.875 and 85.75/87, respectively, compared to the previous week’s 86.75/88.25 and 80.875/82.375.
Nigeria’s benchmark crude grade, Bonny Light, edged higher by 1.95% on a week-on-week basis, closing at $68.60 per barrel. The modest gain reflects a favourable outlook for oil demand in 2025, as noted in the IEA’s latest commentary.
However, despite the price uptick, Nigeria’s external reserves continued their worrying descent. The gross foreign exchange (FX) reserves declined by a further 0.29% week-on-week, closing at $37.89 billion as of Wednesday.
This sustained depletion is largely attributable to persistently weak FX inflows, which have limited the Central Bank’s capacity to rebuild buffers. Global equities traded with mixed sentiments this week as global trade-related developments continued to drive investor sentiments.
Accordingly, US stocks (DJIA: -1.4% and S&P 500: -1.6%) are set to close the week lower amid renewed concerns over trade tensions following the Trump administration’s midweek decision to tighten restrictions on chip exports to China.
On the other hand, European equities—STOXX Europe gained +3.9% and FTSE 100 rose +3.3%, thus reversing last week’s losses as investors grew cautiously optimistic about potential relief from US tariffs.
Also supporting investors’ sentiment in the region was the positive UK inflation rate, which printed at +2.6% year-on-year for March, outperforming the 2.7% expectation.
In Asia, Japanese equities Nikkei 225 climbed by +2.4% on encouraging signs from US-Japan trade talks, while Chinese equities posted gains, driven by a blend of positive economic data as well as hopes of fresh policy support from Beijing to offset tariff impacts.
On a broader note, emerging market equities (MSCI EM: +1.3%) closed higher, supported by improved investor sentiment in China (+1.3%). Similarly, the frontier market equities (MSCI FM: +1.6%) ended the week on a strong note, buoyed by notable gains in Morocco (+6.6%) and modest improvements in Romania (+0.4%).
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