Nigeria Eurobond Yield Drops to 9.6% on Fresh Rally
The average yield on Nigeria’s Eurobond declined in the international market as foreign portfolio investors and local banks with investment in offshore debt asset increased their bets.
The buy actions followed recent increase in benchmark interest rate by 25 basis points to 27.50% by the monetary authority. The adjusted to policy rate was targeted at rising inflation in Nigeria, causing negative interest yields in the local debt market.
The expectation of further rates cut in the U.S. by the Federal Reserve would drive foreign investors into the African bond market to take advantage of attractive yield.
In Nigeria’s sovereign Eurobonds market, buy pressure across the short, mid, and long segments of the yield curve caused the average yield to decline by 0.01%, settling at 9.66%, Cowry Asset Limited said in a note.
Most of the day’s buying interests were seen in 2025s, 2029s, 2032s, and 2049s Eurobond papers. Similar bullish sentiment was observed across the curve in Egypt and Angola, TrustBanc Financial Group said in its market report.
According to AIICO Capital Limited, the Eurobonds market recovered as ceasefire discussions between Israel and Hezbollah continued, generating positive sentiment in African sovereign bonds, particularly in Nigeria, Angola, and Egypt.
As a result, the average mid-yield for Nigerian bonds, analysts said in its note to investors. In related updates, Core PCE prices in the US rose by 2.8% year-on-year in October 2024, marking a six-month high, while the US economy grew at an annualized rate of 2.8% in Q3 2024, unchanged from earlier projections and down from 3% in Q2.
In the foreign exchange market, the Naira depreciated by 0.08%, closing at ₦1,660.83 per dollar in the official market, while in the parallel market, it closed at ₦1,735 per dollar. #Nigeria Eurobond Yield Drops to 9.6% on Fresh Rally Naira Depreciates Ahead of 2-Week Automated FX Trading Trial
