Nigeria’s sovereign Eurobonds saw renewed investor demand this week as offshore participants increased exposure amid expectations of global monetary easing and firmer oil prices.
The rally comes on the heels of the U.S. Federal Reserve’s recent rate cut, which encouraged global investors to reassess allocations across emerging markets. Analysts say African issuers, including Nigeria, have benefited from portfolio realignments as foreign players seek higher yields.
Nigeria’s central bank has also mirrored the Fed’s easing stance, reducing its benchmark rate in response to slowing inflation and currency stability. Market observers believe this has improved the country’s attractiveness in the international debt market.
Trading data showed mixed performance across the African Eurobond curve on Wednesday. While shorter-term bonds experienced mild price declines, mid-to-long-term maturities posted gains, lifting overall investor sentiment. As a result, Nigeria’s average Eurobond yields eased by three basis points to 7.89%, according to Cowry Asset Limited.
Energy markets further supported Nigeria’s outlook, with Brent crude climbing 3.24% to $69.14 per barrel and WTI crude advancing 2.22% to $64.82. The gains followed a surprise drop in U.S. crude stockpiles and supply disruptions in Iraq, Venezuela, and Russia.
Investment managers, including AIICO Capital, suggest that Nigeria’s Eurobond performance could remain positive if oil maintains upward momentum. However, gold prices pulled back as the dollar strengthened, with spot gold down 1.23% at $3,717.97/oz and U.S. futures retreating 1.21% to $3,750.15/oz.
“Offshore appetite for Nigerian Eurobonds is being driven by a favorable mix of oil price strength, monetary easing, and relatively attractive yields,” said one Lagos-based market analyst.
