Nigeria’s Eurobonds Yield Inches Near 11% over Sell Pressures
The average yield on Nigeria’s sovereign Eurobonds spiked to about 11% at the international market as foreign portfolio investors and other asset managers trimmed their holdings amidst surging demand for safer investment assets.
With the U.S. protectionist stance, investment experts said there is a need to redefine globalisation of trade as 180 countries face higher tariffs under the President Donald Trump administration.
Last week, risk-off sentiment dominated Nigeria’s sovereign Eurobonds market across short-, mid-, and long-term maturities, driven primarily by investor sell-offs in the September 2028 and March 2029 bonds.
African Eurobonds endured a turbulent week as risk-averse sentiment dominated investor behavior, spurred by escalating global trade tensions and weakening oil prices, AIICO Capital said.
The market reacted negatively to President Donald Trump’s tariffs, pushing Nigerian Eurobond yields up because foreign investors sell down interest to search for much safer investment assets that could earn them alpha.
By midweek, the market experienced its sharpest single-day decline in recent memory, as new expansive U.S. tariffs sparked recession fears while oil prices plunged, driving yields up. In the US, the equities market plunged sharply as countries prepare retaliatory duties on US exports.
China reacted decisively with a 34% tariff on US goods. In the latter part of the week, investors sought refuge in safer assets, leading to further selloffs. Consequently, Nigerian Eurobond yields surged 118 bps week on week to close at 10.77%, its six-month high.
Analysts reported that growing trade tensions, rising oil supply, and softening demand pose substantial global risks—heightening US recession fears and driving continued de-risking of African markets as investors seek safer assets.
The bearish tone was driven by Trump’s proposed tariffs on trade partners and OPEC+’s move to raise oil output by 411,000 bpd, both of which dampened investor sentiment.
Yields spiked across the board, with the Nov-27 and Mar-29 maturities recording the steepest increases, rising by 174 bps and 158 bps, respectively, TrustBanc Financial Group Limited said in its market update.
Traders said they expect the negative sentiment to persist unless there is a favourable development on the international or local front. #Nigeria’s Eurobonds Yield Inches Near 11% over Sell Pressures FCMB Climbs as Investors Await Audited Results
