Nigeria’s Sovereign Eurobond Yield Rises to 9.75%
Eurobond: The market has continued to gauge the impacts of US Fed rate cuts on debt asset portfolio returns in the international capital market. Settling below 10%, Nigeria’s sovereign US dollar bond trading in the international market surged as uncertainties caused investors to begin to rebalance their portfolios.
According to investment firms, foreign portfolio investors are quickly adjusting positions, and this led to a selloff in Nigeria’s sovereign Eurobond in the market. But some fixed income experts with global coverage told MarketForces Africa that the next few months will see an improved appetite for Nigeria and other African Eurobonds.
Yesterday, investors offloaded Nigeria’s US dollar bonds across standard maturities. Pressure on the short, mid and long ends led to a 0.16% increase in the average yield to 9.75%, Cowry Asset Limited said in a note to investors.
The US Fed 50 basis points rate cut is expected to trigger increased flows of hot money into African markets with an optimized return as sole objective. Top African countries with elevated yields on sovereign assets would start seeing an influx of foreign portfolios that would be redirected as US market prices in rate adjustments, analysts said.
In the African Eurobonds space, selling rallied persisted from last week. In a note, fixed income analysts at AIICO Capital Limited said they observed selling interests across Nigeria, Angola, and Egypt.
On average, the mid-yield across the Nigerian curve increased. “We anticipate market attention will be on PMI data this week, followed by the Fed’s preferred inflation measure,” AIICO Capital said. Elsewhere, the yield on the 2-year Treasury note gained less than 1 basis point, to 3.576%, according to Dow Jones Market Data.
The yield on the 10-year Treasury note gained 1.3 basis points, to 3.740%. The yield on the 30-year Treasury bond increased by 1.3 basis points, to 4.083%. #Nigeria’s Sovereign Eurobond Yield Rises to 9.75% Liquidity: Banks Drive Yield Surge with T-Bills Selloffs
