Nigeria’s Eurobonds rise by up to 9.44%, outpacing crash
Average yields on Nigeria’s Eurobonds rose by 7 basis points in international capital markets as selling pressure from foreign portfolio investors eased.
Investors continue to price in uncertainty over the country’s macroeconomic situation and the recent spike in inflation. Some analysts said disinflation could force the central bank to raise benchmark interest rates again after September’s disappointing economic data.
The National Bureau of Statistics (NBS) reported that the composite index sharply reversed due to consumer price inflation, rising to 32.70% in September 2024 from 32.19% in August.
This was the first rise in three months and contradicted analysts’ expectations that price pressures would continue to ease despite Nigeria’s central bank’s aggressive monetary tightening.
Analysts said in a note that Nigerian federal bonds traded negatively in the local bond market, with the average yield increasing by 5 basis points to 19.30%.
Eurobond markets have been mixed this week amid interest rate cuts from the US Federal Reserve, with interest in Nigeria, Angola and Egypt remaining flat.
Analysts say hot money will flow into African markets after the next U.S. interest rate cut to capture higher yields on foreign borrowings.
Cowley Asset Limited last week said in a report that short-, medium- and long-term selling pressure on Nigeria’s sovereign eurobond yield curve increased by 7 basis points to an average yield of 9.44%.
Emerging market currencies and debt faced challenges from rising interest rates and election uncertainty in the United States. AIICO Capital Limited told investors in a note that a key development is that the IMF may reduce fines for countries in crisis, which could have a significant impact on markets. said.
Analysts said sovereign debt defaults were expected to rise, but an improvement in Ghana’s currency rating and a private sector deal between Saudi Arabia and Egypt boosted sentiment. #Nigeria’s Eurobonds outperform falling market by up to 9.44%
Yields on Nigerian Treasury bills rise on bank Trim Holdings
