Nigeria’s Sovereign Eurobond Yield Dips as FPIs Raise Bets

As foreign portfolio investors (FPIs) continued to position at the Nigeria’s sovereign Eurobond market, the average yield nosedived further while asset price surged.

The market anticipates the latest US Fed rate cut would pushed funds into African debt capital market,

But the hot monies have started flowing toward the Nigerian market already on the back of elevated yield on local and foreign currency borrowing instruments.

Foreign investors are taking advantage of Nigeria’s elevated yield on debt papers, and this is expected to persist until economic indicators improved.

In the local bond market, traders saw bearish trend for most of the day as yields continued to rise across the board.

There was selling interest in the Feb 2031 paper, but this was followed by renewed buying by investors looking to take advantage of its attractive yield. As a result, the average mid-yield settled at 19.30%.

Likewise, the Eurobonds market ended on a negative note as selling pressure affected the Nigeria and Angola bonds.

In Nigeria’s sovereign Eurobonds market, buy pressure across the short and mid ends of the yield curve resulted in a marginal decrease leading to an average yield of 9.32%, Cowry Asset Limited said.

However, there was good buying interest in the Egypt bonds due to positive developments such as reduced tensions in the Middle East and a mutual investment agreement with Saudi Arabia.

Oil prices declined following OPEC’s third consecutive reduction in its 2024 demand forecast. Brent prices dropped by 1.92% to $77.52, while WTI prices fell by 2.13% to $73.95.

Gold prices also softened as China’s extensive economic stimulus measures, the largest bullion consumer, did not boost investor confidence. Moreover, a rally in the U.S. dollar to two-month highs restricted the upward momentum, with gold reaching $2,665.80 per ounce. #Nigeria’s Sovereign Eurobond Yield Dips as FPIs Raise Bets

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