The yields on Nigerian Eurobonds have fallen to their lowest in 2025 as they continue to attract significant foreign investor interest, driven by improving economic prospects.
Average yields on Nigerian Eurobonds declined to 9.05 percent on February 5, the lowest in 2025, signaling higher buying interest by foreign portfolio investors.
“The price of Eurobonds have been increasing and the yields are falling because of the prospect of better economic conditions in Nigeria,” said Matilda Adefalujo, a fixed-income analyst at Meristem.
The average price of Nigerian Eurobonds increased to $92.95 on February 5 from $91.53 at the beginning of the year. A similar trend was observed in the Sub-Saharan African (SSA) Eurobonds market, as average yields decreased by two basis points to 8.7 percent.
Read also: Nigeria Eurobond yields dip first time in 3wks as investor optimism rises
“The positive sentiment was mostly driven by investor interest in a duo of Kenya’s 2018 instruments (-0.3 percent and -0.1 percent) and a duo of Ivory Coast’s 2024 instruments (-0.5 percent apiece),” analysts at Afrinvest said.
Olaolu Boboye, head of research at CardinalStone, said yields declined across Nigeria and other SSA markets last week because they moderated globally, noting that there is now a bit of clarity concerning Trump’s direction especially about trades and tariffs.
Last week, Scott Bessent, United States’ treasury secretary, said the Trump administration is more focused on keeping treasury yields low and is less focused on what the Federal Reserve does.
While in the past President Donald Trump had implored the Fed to cut its benchmark rate, Bessent said Wednesday that the current strategy is using the levers of fiscal policy to keep rates low.
The Fed left the key interest rate unchanged at its January meeting, in a range of 4.25 percent to 4.5 percent, hitting a pause after a string of cuts late last year.
This, alongside the stability of the naira and other reforms taken by the current government, has increased confidence in Nigeria’s treasuries.
Some of the reforms, which include more transparent pricing of the dollar through the introduction of Electronic Foreign Exchange Matching System (EFEMS) launched in December last year and higher interest rates on treasury bills, attracted dollar inflows and helped stabilise the naira after a period of turbulence.
Last week, the Eurobonds market saw a mixed performance with a bullish tilt.
Read also: Naira stabilises as EFEMS, Eurobond, diaspora dollars flow in
Strong investor demand early in the week drove average yields down to 9.23 percent last week from 9.47 percent the previous week.
However, late-week selloffs reversed some gains, pushing yields back up to 9.31 percent. Despite this, yields declined marginally by one basis point week-on-week.
Investor interest was broad-based across the yield curve, with shorter-dated maturities experiencing the sharpest declines.
This was driven by increased buying interest in short-dated maturities such as NOV-25, NOV-27, SEP-28,and MAR-29.
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