Eurobond Yields Drops to 6.89% as Foreign Demand Drives 6bps Rally

Nume Ekeghe 

Nigeria’s Eurobond market extended its bullish momentum last week, with yields declining further amid sustained offshore demand, pointing to improving foreign investor confidence in the country’s macro-economic outlook.

According to a report by Meristem, average Eurobond yields fell by 6 basis points to 6.89 per cent, from 6.96 per cent in the previous week, supported by broad-based buying interest across the curve.

Demand was particularly strong in the mid-tenor segment, with bonds such as the Jan-31, Feb-32, and Feb-38 papers recording yield declines of 14bps, 12bps, and 11bps respectively, indicating renewed appetite for Nigerian sovereign risk among foreign portfolio investors.

The sustained rally reflects improving sentiment around Nigeria’s reform trajectory, particularly in the foreign exchange market, as well as efforts to stabilise external reserves and restore policy credibility.

Meristem stated: “The Eurobond market extended its bullish momentum into this week, as average yield fell 6bps to 6.89 per cent from 6.96 per cent previously. Buying interest was spread across the curve however dominant in the belly of the curve, with bonds like the Jan-31 (-14bps), Feb-32 (-12bps), and Feb-38 (-11bps) bonds posting the strongest yield declines. Nonetheless, sell-offs was observed in the sept-28 (+2bps) in bonds.”