Nigeria’s Eurobond market ended February positively, with yields dropping from 9.21% to 8.80%, reflecting strong foreign investor confidence. The Sub-Saharan African market showed an average yield decline to 8.4%. Factors influencing this trend include macroeconomic improvements, geopolitical elements, and global economic data releases.
Nigeria’s Eurobond market showed positive momentum in February, indicating strong foreign investor confidence. The average yield decreased from 9.21% at the month’s beginning to 8.80%, reflecting a substantial investor appetite. In contrast, the Sub-Saharan African Eurobond market saw a moderate yield decline, averaging 8.4%, showcasing Nigeria’s superior performance in the region.
According to Afrinvest analysts, the increased interest was attributed to improving macroeconomic factors and lowered interest rates. Notably, Kenyan bonds experienced significant gains with yields declining due to the proposal of a centralized bond reporting system, which also benefited Nigerian Eurobonds.
Despite a slight uptick in yield to 8.80% from 8.79% due to minor sell-offs, this monthly increase signifies sustained investor enthusiasm amidst global economic fluctuations. CSL analysts noted this drop in yield is influenced by geopolitical uncertainties and recent economic updates, including U.S. Q4 GDP growth of 2.3%, which fell in line with expectations.
Furthermore, while Nigeria continued on a positive trend, countries such as Ivory Coast faced overall yield increases across bond tenors resulting from significant sell-offs. Enthusiastic trends were still evident in Kenya and South Africa, with consistent declines in their respective yields.
Looking ahead, analysts at Afrinvest forecast a favorable market driven by substantial liquidity from coupon payments and maturities, predicting a bullish outlook supported by a dovish interest rate environment. They emphasize that the ongoing pursuit of yield will likely maintain offshore interest within the region.
The February rally in Nigeria’s Eurobond market confirms heightened foreign investor confidence, as evidenced by a notable yield drop from 9.21% to 8.80%. Factors such as global economic data, regional macroeconomic improvement, and a dovish interest outlook are expected to sustain this positive performance going forward. Continued international interest, alongside strong liquidity inflows, positions Nigeria favorably amidst an ever-evolving market landscape.
Original Source: businessday.ng
