Nigeria Eurobonds Rally, Yield Shrinks to 9.91%
Nigeria’s sovereign Eurobonds experienced positive trading activity in the international market, which caused yield to decline by 7 basis points. Foreign investors logged fresh demand for Nigeria’s US dollar, causing the average yield to decline by 0.07% to 9.91%, according to Cowry Asset Management Limited.
The US 10-year Treasury note yield rose to 4.56%, following an 8 bps climb the day before and reaching the highest level in four weeks. Disappointing results from recent 5-year and 2-year auctions, along with a surprising jump in US consumer confidence and growing inflation expectations, led to a bond selloff as investors pared back bets for interest rate cuts.
The yield on the 2-year Treasury climbed 2.2 basis points to 4.973%.nThe yield on the 30-year Treasury added 2 basis points to 4.690%.
In the local bond market, there was slight trading activity for FGN bonds. However, the average yield stayed muted at 18.69%. On the other hand, Treasury Bills was active and bullish, driven by strong buy sentiment across short, mid, and long tenors.
This led to a 3 basis points drop in the average T-bills yield to 20.36%. Last week, the domestic bond secondary market was relatively quiet as market players anticipated the outcome of the Monetary Policy Committee meeting.
Minimal trading activities were witnessed post MPC as investor sentiments buffered the average yield to 18.67% from 18.69% the previous week. Most demand was witnessed on the long end of the curve, as its average yield printed at 149 bps.
Specifically, the JAN-2045 (59bps) and JUL-2045 (31bps) instruments enjoyed the most buying interest week on week respectively. Afrinvest said expect tepid investor sentiments in the bond market as investors continue to hunt for opportunities across the curve. #Nigeria Eurobonds Rally, Yield Shrinks to 9.91%
