Nigeria Eurobonds Yield Pulls Back as Offshore Demand Improves
Nigeria’s Eurobonds yield pulled back to 11.08% in the international market as offshore or foreign portfolio investors’ sentiment improved after the U.S. government paused tariffs implementation for 90 days.
The global markets were rattled by US reciprocal tariffs, which resulted in a minimum of 10.0% import tariffs on over 180 countries. China and a few other countries initiated counter-tariff responses to drive the world economy into another trade war.
The consequence of the implied uncertainty cascaded into material demand concerns and weakened the outlook for commodities. Consequently, the Brent crude oil price has declined.
The Nigerian foreign exchange market has also been negatively affected by offshore investors’ flight to safety as increasing domestic dollar demand put pressure on the Naira.
Some of the concerns relate to the risk of the government not meeting its revenue target and the higher deficit that could imply. Speaking to this risk, crude production declined to about 1.67 million barrels per day (mbpd) in February from 1.74 mbpd in January amidst the material contraction in oil price.
However, after the U.S. decision to pause on tariffs, trading activities in Nigeria’s sovereign Eurobonds market turned positive across short-, mid-, and long-term maturities.
The sovereign borrowing notes saw strong investor demand for the Nov-2027 bond. As a result, the average yield declined by 0.70% to 11.08%, according to Cowry Asset Management Limited.
However, the momentum gradually waned as the day progressed, leading to a more cautious close. For context, the Feb-38 and Jan-49 papers traded as low as 11.05% and 11.07%, respectively, before settling at 11.50% and 11.45%, a notable pullback from 12.00% and 11.72% in the prior session. #Nigeria Eurobonds Yield Pulls Back as Offshore Demand Improves FG Orders Tertiary Institutions to Advertise Job Vacancies
