Eurobond yield moderation points to stronger sentiment   

10 July 2018 ( Lagos ) : Yields on Nigeria’s Eurobonds have moderated in recent weeks, perhaps indicating a turn in the bearish run endured by Nigeria and other emerging market assets in recent months. Analysts recall that yield on Nigeria’s 2032 Eurobond rose from 7.31% at the end of May to a peak of 8.39% on the 19th of June before moderating slightly to 8.11% at the end of June. 

This trend had been driven by a global sell-off in emerging market assets amid more hawkish U.S. monetary policy and simmering global trade tensions. This pressure has cooled in recent weeks, with yield on the 2032 Eurobond moderating to 7.64% yesterday. 

Analysts note that this trend extends beyond Nigeria – yield on Ghana’s 2026 Eurobond rose from 7.22% at the end of May, peaked at also peaked on the 19th of June (8.14%), and has now moderated to 7.28%. This development is welcome for Nigeria given its intention to raise $2.8 billion in external debt for the 2018 Budget. 

Reporting for EasyKobo on Tuesday, 10 July 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited

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