Riskoff Sentiment Raises Nigeria’s Eurobond Yield by 7bps
Foreign portfolio investors sell down their interest in Nigeria’s Eurobonds over riskoffs sentiment spooked by the inflation surge. Latest data showed that Nigeria’s inflation rate accelerated by 20 basis points to 34.80% after the Central Bank’s 2024 hawkish pose.
Inflation setting has reduced real return on naira assets as the authority mulls rebasing of consumer price index and gross domestic product to reflect most recent development in the economy.
Foreign investors, including Nigerian banks with investment in sovereign Eurobonds, trimmed their holdings across the short, mid and long ends of the yield curve on Thursday. As a result, the average mid-yield for Nigerian bonds rose by 7 basis points, settling at 9.33%, according to AIICO Capital Limited.
The firm explained that the Eurobond market exhibited a mixed to bearish trend, adding that the majority of participants capitalised on the declining yields following a two-day bullish phase to realise gains on their holdings.
Notable sell-offs were observed in the Sub-Saharan Africa (SSA) and North African papers across the curve. Selling pressure was evident across the curve, particularly at the short- to mid-end.
Notably, the Nov-25 and Mar-29 maturities recorded the most significant increase in yield, rising by 11 bps and 10 bps, respectively, TrustBanc Financial Group Limited told investors in a note.
South Africa and Morocco mirrored Nigeria’s bearish trend, while Ghana, Egypt, and Angola saw a broad-based bullish bias. #Riskoff Sentiment Raises Nigeria’s Eurobond Yield by 7bps $9.6bn P&ID Scam: I’ve No Witness to Call, Briton Tells Court
