Nigeria Eurobonds Increase, Yield Falls To 9.91%

DMO Set To Auction N150bn Bond On FG's Behalf

Positive foreign market trading activity for Nigeria’s sovereign Eurobonds resulted in a 7 basis point decrease in yield. According to Cowry Asset Management Limited, new demand from foreign investors for Nigeria’s US currency caused the average yield to drop by 0.07% to 9.91%.

After increasing by 8 basis points the previous day, the yield on US 10-year Treasury notes reached 4.56%, its highest level in four weeks. Bond prices dropped as investors reduced their bets on interest rate reductions in response to disappointing outcomes from recent 5-year and 2-year auctions, an unexpected increase in US consumer confidence, and rising inflation predictions.

The 2-year Treasury’s yield increased by 2.2 basis points to 4.973%.The 30-year Treasury’s yield increased by 2 basis points to 4.690%.

In the local bond market, there was slight trading activity for FGN bonds. However, the average yield stayed muted at 18.69%. On the other hand, Treasury Bills was active and bullish, driven by strong buy sentiment across short, mid, and long tenors.

This led to a 3 basis points drop in the average T-bills yield to 20.36%. Last week, the domestic bond secondary market was relatively quiet as market players anticipated the outcome of the Monetary Policy Committee meeting.

Minimal trading activities were witnessed post MPC as investor sentiments buffered the average yield to 18.67% from 18.69% the previous week. Most demand was witnessed on the long end of the curve, as its average yield printed at 149 bps.

Specifically, the JAN-2045 (59bps) and JUL-2045 (31bps) instruments enjoyed the most buying interest week on week respectively. Afrinvest said expect tepid investor sentiments in the bond market as investors continue to hunt for opportunities across the curve.

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