The Nigerian bonds benchmark yield hit about 15.8% as local investors offloaded their portfolio in reaction to accelerating consumer inflation in the country.

Nigeria Eurobond Yield Ticks Up Over Sell Pressure

Benchmark yield on Nigeria’s US dollar bonds or Eurobond ticked up midweek as foreign investors unpacked the instruments as the Federal Reserve maintained the status quo on rates. Selloffs on the country’s US dollar bonds dragged prices downward while associated yield spiked by 21 basis points.

At the conclusion of the FOMC meeting, the US Fed kept interest rates steady on Wednesday as policymakers struggled to determine whether financial conditions may be tight enough already to control inflation, or whether an economy that continues to outperform expectations may need still more restraint.

Reacting to the decision, investing activities in Nigeria’s sovereign Eurobonds market closed bearish. Investors’ moods swung negative as Africa’s largest economy is confronting high inflation and FX crisis at home.

According to bond traders, the market has seen a shift in risk sentiment for most trading sessions in the week. As a result, the average yield in the market inched higher by 21 basis points to close at 11.61% due to selling pressures.

Similarly, trading in the local bond secondary market was bearish, as the average yield advanced by 5 basis points to 15.4%, according to Cordros Capital note. Across the benchmark curve, traders noted that the average yield expanded at the short (+15bps) and long (+2bps) ends.

The yield curve shifted as fixed interest securities investors sold off the MAR-2025 (+46bps) and APR-2049 (+36bps) bonds, respectively.

Meanwhile, the average yield closed flat at the mid-segment. APR 49 FGN papers emerged as the worst performers at midweek on the back of sell interests which drove the average bond yield in the bond market higher by 4 basis points, Cowry Asset Limited told investors in a note.  

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