Nigeria Eurobond Yield Dips on Foreign Investors Position Takings
Bargain hunting in Nigeria’s sovereign Eurobonds market across the short, mid, and long ends of the yield curve led to a 13-bps decrease in the average yield to 9.49%, Cowry Asset Limited said in its market update.
Offshore investors position-taking in the international debt market drove yields downward on hope of improving economic performance in Nigeria in the current year. Analysts are of the view that a move to a safe haven as the market expects US Fed rates cuts to drive hot money into Nigeria and other African countries where yields remain elevated.
The market has priced in Nigeria’s steep headline inflation and hopes to see monetary policy action remaining hawkish in the short to medium term as the fight against price instability gains momentum. The Eurobond market started the year on a subdued note but gradually gained momentum, traders at AIICO Capital Limited explained.
Fixed income market analysts said initial sessions saw mixed activity, with limited bids for Nigerian and Egyptian bonds and slight weakness in Angola. By midweek, a bullish tone emerged, driven by increased interest in sub-Saharan African (SSA) and North African sovereign bonds, particularly from Nigeria, Angola, and Egypt.
Angola and Nigeria led a rally as oil prices climbed, while Egypt gained from positive IMF developments that could unlock a $1.2 billion disbursement. The market expects sentiments to remain in the new week, though cautiously, as participants continue to reassess the current global macroeconomic conditions.
By Friday, the bullish trend remained dominant, bolstered by foreign portfolio investors (FPIs) taking advantage of attractive yield levels. Notably, the Nov-25 (-29bps) and Feb-32 (-21bps) maturities led the rally, recording the most significant yield declines this week, according to TrustBanc Financial Group Limited. #Nigeria Eurobond Yield Dips on Foreign Investors Position Takings Goldman Sachs, IFC Partner African Banks to Empower Women Entrepreneurs
