Nigeria’s Eurobonds Yield Dips 19bps as Foreigners Boost Portfolios
The Eurobond market beamed with buying interest in Nigeria’s Eurobonds in the international capital market, similar experience to trade pattern experienced in the previous day.
African sovereign papers saw increase bets amidst expectation for further US Fed rates cuts. Most African countries, including Nigeria, are still battling with high inflation rate.
To compensate the market and correct money pricing, interest rates have been uptrend, rising faster when the global central bankers are cutting lose their hawkish poses. Investors positioned themselves in anticipation that Federal Open Market Committee (FOMC) would remain dovish after its recent first attempt in years.
In Nigeria’s sovereign Eurobonds market, there was buy interest across the short, mid, and long ends of the yield curve caused the average yield to decrease by 19 basis points, settling at 9.55%, Cowry Asset Limited told investors in a note.
AIICO Capital Limited explained to investors in its noted that the market witnessed strong buying activity in Nigeria, Angola, and Egypt, with most papers gaining over $2. Traders noted there was significant volume at the mid to long ends of the curve specifically amidst expectation that US Fed rates cut would triggered a move to safe haven.
In its note, TrustBanc Capital Limited told investors that Feb-32 maturity recorded the most significant drop in yield, falling by 24 basis points . On the day, the average benchmark yield declined by 19 basis points due to surging buying interest.
A slew of fixed income analysts maintained that the outcome of Federal Reserve’s meeting is expected to play a crucial role in shaping market sentiment in the near term. In Oct, Africa (SSA) bonds, including Nigeria’s, faced particular pressure as investors shifted towards safer assets.
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