Nigeria Eurobond Yield Dips to 10.31%
The average yield on Nigeria’s US dollar bonds or Eurobonds declined by 13 basis points to 10.31% at foreign interest relaunching interest in the debt market asset.
Investors in the international debt capital market are weighing Nigeria’s economic policy targeted at achieving sustainable growth to determine their portfolio strategy for 2024.
The fast and furious spate of reforms introduced mid-year 2023 has also reflected in asset pricing with more fund allocation to Nigeria’s sovereign assets – though rates remain relatively impressive versus African markets peers.
A slew of fixed income analysts told MarketForces Africa foreign investors’ buying action aligns with sovereign credit ratings and the sizable economic balance sheet of the country. Nigeria plans to raise foreign capital to support 2024 budget.
Last week, the average yield increased by +90 basis points to close at 10.5%. In the local bond market, trading activity was slightly positive as the average yield declined by 0.01% to close at 13.72%.
Snaps a two-trading-day streak of rising yields, the 2-year US Treasury yield declined 0.046 percentage points to 4.343% today.
The yield on the 10-year US Treasury note fell below 4%, retreating from the near one-month high of 4.05% touched on Friday as markets further gauged the Fed’s incoming policy trajectory ahead of the CPI release this week.
The decline in US Treasury yields across most durations aligned with an aggressive drop for key crude oil and gasoline benchmarks due to their impact on lower inflation in coming months. Dangote Reacts to EFCC Visit to Headquarters
Analysts noted that in Nigeria’s sovereign Eurobonds market, the prevailing sentiment was bullish, across the short, mid and long ends of the yield curve, causing a decrease of 0.13% in the average yield to 10.31%.
In the local FX market, Naira appreciated by 1.47% to close at N856.57 to the US dollar. # Nigeria Eurobond Yield Dips to 10.31%
