Foreign Investors Rotate Out of Nigerian Eurobond as Sentiment Shifts
Foreign portfolio investors (FPIs) reduced their exposure to Nigerian Eurobonds in the international market as risk-off sentiment triggered by renewed threats from US tariffs pushed average yield upward.
The average yield climbed by four basis points as the Nigerian Eurobond market closed on a bearish note, driven by broad-based sell-offs across the short-, medium-, and long-term tenors. The market recorded increased demand for Nigerian Eurobonds maturing in NOV-2025, reflecting the current sentiment and portfolio rebalancing around short-duration assets.
The average yield on the Nigerian sovereign US dollar-denominated bond rose by four basis points to 8.58%, Cowry Asset Limited said. The sovereign asset came under pressure amid global risk-off sentiment. Investment firm TrustBanc Financial Group Limited said selling was evident across benchmark tenors, driven by renewed volatility.
U.S. tariff announcements targeting 14 countries triggered unease across the global financial markets, with a renewed drive towards safe haven assets. Foreign portfolio investors’ mood switched following President Donald Trump’s new tariff threats, which started to weigh on financial market sentiment.
The US plans 25% duties on Japanese and South Korean imports from August, plus a 10% levy on BRICS-aligned nations. These warnings followed BRICS’ criticism of US trade policy at their recent summit. Nigerian Eurobond yields edged up 3 bps to 8.63% amid the uncertainty. Analysts said the current market mood should hold this week, with rising oil prices offering key support to Nigerian and Angolan bonds.
Nigeria’s Eurobond market rallied last week as foreign investors repositioned in anticipation of macroeconomic stability and improving credit outlooks. The average yield on sovereign Eurobonds dropped by 10 basis points to 8.50% for the week. Most maturities recorded yield compression, except for the NOV-27 issue.
Investors are closely watching the upcoming NOV-25 Eurobond maturity as well as prospects of improved sovereign ratings. At the same time, domestic fixed income instruments are poised to attract further interest, supported by the twin tailwinds of moderating inflation and potential monetary easing by the Central Bank. Trump Leaves Door Open to Further Delay Tariffs
