Nigeria’s Eurobonds Ticks Up to 9.44% over Selloffs
The average yield on Nigeria’s Eurobonds yield rose by 7 basis points in the international capital market due to sell pressures triggered foreign portfolio investors weak appetite.
Investors continue to price in uncertainties in the macroeconomic condition in the country and the latest inflation rate surge. Some analysts said disinflation could force the Central Bank to hike benchmarked interest rate again after sept data disappointed.
National Bureau of Statistics (NBS) reported that the consumer price inflation revealed a sharp reversal in the headline index, which rose to 32.70% in September 2024, up from 32.19% in August.
This marks the first increase in three months, defying analysts’ expectations of continued easing in price pressures, despite the Central Bank of Nigeria’s aggressive monetary policy tightening.
In the local bond market, there was negative trading activity on Federal Government of Nigerian bonds which led to a five basis increase in the average yield to 19.30%, analysts said in a note.
Amidst US Fed rate cut, the Eurobonds market had a mixed performance this week with sideways interest across Nigeria, Angola, and Egypt papers.
Analysts said there will be influx of hot monies flooding the African market to capture relatively high yield on foreign borrowing after next rate cut in US.
Last week, sell pressure across the short, mid and long ends of the yield curve in Nigeria’s sovereign Eurobond resulted in a 7 basis points increase, leading to an average yield of 9.44%, Cowry Asset Limited said in a report.
Emerging market currencies and debt faced challenges from rising U.S. rates and election uncertainties. A key development was the IMF’s potential reduction of penalty fees for distressed nations, which could significantly impact the market, AIICO Capital Limited told investors in a note.
Analysts said sovereign defaults are expected to rise, but Ghana’s currency rating improved, and Saudi-Egypt private sector deals lifted sentiment. #Nigeria’s Eurobonds Ticks Up to 9.44% over Selloffs
