Ahead of the nationwide demonstration that will begin in two days, the average yield on Nigeria’s sovereign Eurobonds was under selling pressure on the international market on Tuesday.
Amid the persistent risk-off mood in debt securities and the deteriorating economic conditions, foreign investors who were dealing Nigerian US dollar bonds in the market offloaded some papers.
In an email to investors, traders at Cowry Asset Limited said that the negative sentiment across a range of maturities caused the average yield to climb by 4 basis points, to 10.14%.
Financial market indicators, which reflect the economic policies of the country, have continued to be unfavorable. The most recent monetary policy rate adjustment has increased borrowing costs.
Despite interest rate tightening, inflation rate has remained stubbornly high, with the hope that the price level will retreat in July as the base effect sets in.
The local fixed-income market players have started to incorporate changing market dynamics into their portfolio strategies. The authority hiked spot rates on local bonds sold to market participants in its latest auction after an interest rate adjustment.
At the early hours of trading, the Eurobonds market sustained a bearish theme, with selling interests observed across the SSA and North African papers, AIICO Capital said in a report.
However, the market settled flat, given the influx of some buyers towards the closing bell, the firm said. In a data release on Tuesday, US consumer confidence printed at 100.3, stronger than both the estimate of 99.70 and the previous figure of 97.80.
