Nigerian US Dollar Bond Yield Dips by 10bps to 9.3%
The Nigerian US dollar bond yield dipped by 10 basis points week on week to close at 9.3% as foreign investors maintained positive sentiment in the international market last week.
The buying interest heated up after the US Federal Reserve kept fed fund rates unchanged amidst healthy economic data and President Donald Trump called for rates to be cut. Looking towards the Sub-Saharan papers, demand for African papers increased as foreign portfolio investors capitalised on attractive yields.
The bullish touch was witnessed across the short, mid, and long ends of the yield curve, resulting in a decline in the yield curve at the close of the trading session. The Nigeria 2025 and 2027 Eurobonds saw the most buying interest, as the average yield fell 1.0 and 0.5 percentage points month on month, respectively, Afrinvest said.
The Eurobond market opened the week bearish, driven by negative sentiments in the technology sector and concerns over a cost-effective AI model from China. Midweek, performance was mixed, with sideways interest in Nigerian bonds and buying interest in Ghana, Angola, and Egypt, particularly after Egypt’s $2 billion Eurobond issuance, AIICO Capital Limited said in an investors’ note.
The African papers saw a significant buying interest as the Federal Open Market Committee (FOMC) meeting maintained rates at 4.25%-4.50%, with Chair Powell signalling no imminent rate cuts, impacting regional trends.
Towards the end of last week, Nigerian bonds turned bullish, while Angola remained flat, and Egypt faced bearish pressures. On Friday, mild bullish sentiments emerged in Nigeria and Angola, contrasting with Egypt’s bearish trend. Overall, the average Nigerian Eurobond yields declined by 10 bps to 9.26%, AIICO Capital Limited stated.
Strong U.S. economic data initially pushed yields higher, as investors anticipated that the Federal Reserve would maintain elevated interest rates for longer than expected, TrustBanc Financial Group Limited said in an investors’ note. # Nigerian US Dollar Bond Yield Dips by 10bps to 9.3% Naira Gains 4.3% on Tripartite FX Inflows Sources
