Yield Hits 7-Month High as FPIs Exit Nigeria, African Eurobonds
With the sustained risk-off sentiments, Nigeria and other African sovereign Eurobonds experienced massive selloffs in the market as foreign portfolio investors (FPIs) began to search for safer investment assets.
U.S. President Donald Trump redefined global trade by slamming higher tariffs on goods exported into America at different degrees of rates. This triggered massive equities selloffs, and African markets were not excused in the rout.
Transaction details obtained revealed that African Eurobonds remained under heavy selling pressure, with Nigeria and Angola’s oil-linked papers hit hardest as foreign investors weighed their position in the light of the new development.
Analysts at AIICO Capital Limited said in a note that brief relief emerged from bargain hunting, attracted by discounted entry points and tariff optimism, but the rebound faltered after the White House denied reports of a tariff pause as “fake news.”
Nigerian yields ultimately spiked amid the broad retreat that caused increased demand for foreign currency to be upstreamed offshore.
TrustBanc Financial Group Limited told investors in a note that intensified selling drove the average benchmark yield up by bps to 11.65%, the highest since October 2023. Tariffs and weakening economic data are expected to sustain prolonged downward pressure on markets, raising African government borrowing costs.
Yields surged across the curve, with Nov-25 and Nov-27 rising by 129 bps and bps, respectively. Similar bearish sentiment was observed across the curve in Ghana, Egypt, and Angola.
With investor confidence still fragile, the bearish sentiment is likely to persist in the near term, albeit at a moderate pace. #Yield Hits 7-Month High as FPIs Exit Nigeria, African Eurobonds Reps to Intervene Over Electricity Bill Hike at University of Jos
