Foreign Investors Increase Investment in Nigeria’s Eurobonds
The average yield on Nigeria’s Eurobonds dipped by 22 basis points (bps) in the international market as foreign portfolio investors (FPI) increased their bets despite the inflation rate surge in the local economy.
This bullish trend was influenced by the latest Consumer Price Index (CPI), which showed that U.S. inflation increased by 2.9% year on year in December 2024, slightly above November’s 2.7%.
A plan to rebase Nigeria’s gross domestic product (GDP) and consumer price index (CPI) also supported investors increased bets on the sovereign bonds, analysts said.
After U.S. inflation data, positive sentiment prevailed, particularly in the NOV-27 maturity, causing a marginal 22 basis points decrease in the average yield to 9.39%, Cowry Asset Limited told investors in a note.
Notably, the Nov-25 and Mar-29 maturities posted the largest yield declines, dropping by 31 bps and 25 bps, respectively. Similar bullish sentiment was observed across the curve in Ghana, Egypt, and Angola.
On Wednesday, the U.S. 10-year Treasury yield dropped by 14 bps to 4.651%, retreating further from the 14-month high recorded on Monday. U.S Treasury yield direction reflects investor optimism for potential Fed rate cuts, even as concerns linger over inflation and higher rates, TrustBanc said in a note. Looking ahead, analysts said investors are likely to focus on upcoming retail sales and housing starts data.
Analysts said strong bids were observed in the belly and long end of the curves for both Angola and Nigeria, carrying forward momentum from the previous day. # Foreign Investors Increase Investment in Nigeria’s Eurobonds Ministry Seeks $2 billion Fibre Optics Funding
