Investors Flee Stocks as Bond Yields Fall to 15.77% — Nigeria’s Fixed-Income Market Heats Up
Nigeria’s bond market ended last week on a strong bullish note as investors moved heavily into fixed-income assets, driving yields downward and signalling a clear shift away from equities.
Why Bond Yields Fell
• Average benchmark bond yields dropped by 12bps to 15.77%, according to Cowry Asset Management.
• Investors rushed into bonds due to:
• Rising volatility in the equities market
• Uncertainty in global markets
• A desire for safer, predictable returns
This strong demand pushed yields lower, especially on mid- and long-term bonds, where investors expect:
• More stable returns
• Potential capital gains
• Better duration exposure
Eurobonds Tell a Different Story
While local bonds rallied, Nigerian Eurobonds weakened:
• Eurobond yields increased by 32bps to 7.97%, reflecting higher perceived risk.
• Reasons include:
• Stronger U.S. dollar
• Rising geopolitical tensions between Nigeria and the U.S. ⚠️
• Investors becoming more cautious on emerging market debt
Nigeria’s Eurobond Issuance Still a Big Win
Despite Eurobond market pressure, Nigeria achieved a major financing success:
• Raised $2.35 billion in a dual-tranche issuance
• Attracted an impressive $13 billion in investor orders (453% oversubscribed)
• Two tranches:
• 2036 maturity: $1.25bn at 8.625%
• 2046 maturity: $1.1bn at 9.125%
Government officials — including President Tinubu, Finance Minister Wale Edun, and DMO DG Patience Oniha — described the outcome as a strong vote of confidence in Nigeria’s reforms and credit profile.
Proceeds will fund:
• Nigeria’s 2025 fiscal deficit
• Refinancing maturing Eurobonds
• Listings planned on LSE, NGX, and FMDQ
Diplomatic Moves & Investor Confidence
Nigeria is currently engaging diplomatically with the U.S. to ease tensions involving:
• Religious freedom
• Security concerns
Analysts believe these efforts could help sustain foreign investor confidence in the coming months.
Outlook for the Domestic Bond Market
Cowry Asset Management expects:
• Continued bullish sentiment in local bonds
• Strong demand from pension funds, asset managers, and institutional investors
• Investors positioning ahead of the next primary auction
Supportive factors include:
• Expectations of moderating inflation
• Liquidity support from the CBN
Outlook for Eurobonds
The Eurobond market may remain subdued, weighed down by:
• Tightening global monetary conditions
• Stronger dollar
• Persistent geopolitical risks
• Risk-off sentiment in emerging markets
Eurobond performance will depend on:
• Global macroeconomic trends
• Investor appetite for emerging market debt
Nigeria’s bond market ended last week on a strong bullish note as investors moved heavily into fixed-income assets, driving yields downward and signalling a clear shift away from equities.
Why Bond Yields Fell
• Average benchmark bond yields dropped by 12bps to 15.77%, according to Cowry Asset Management.
• Investors rushed into bonds due to:
• Rising volatility in the equities market
• Uncertainty in global markets
• A desire for safer, predictable returns
This strong demand pushed yields lower, especially on mid- and long-term bonds, where investors expect:
• More stable returns
• Potential capital gains
• Better duration exposure
Eurobonds Tell a Different Story
While local bonds rallied, Nigerian Eurobonds weakened:
• Eurobond yields increased by 32bps to 7.97%, reflecting higher perceived risk.
• Reasons include:
• Stronger U.S. dollar
• Rising geopolitical tensions between Nigeria and the U.S. ⚠️
• Investors becoming more cautious on emerging market debt
Nigeria’s Eurobond Issuance Still a Big Win
Despite Eurobond market pressure, Nigeria achieved a major financing success:
• Raised $2.35 billion in a dual-tranche issuance
• Attracted an impressive $13 billion in investor orders (453% oversubscribed)
• Two tranches:
• 2036 maturity: $1.25bn at 8.625%
• 2046 maturity: $1.1bn at 9.125%
Government officials — including President Tinubu, Finance Minister Wale Edun, and DMO DG Patience Oniha — described the outcome as a strong vote of confidence in Nigeria’s reforms and credit profile.
Proceeds will fund:
• Nigeria’s 2025 fiscal deficit
• Refinancing maturing Eurobonds
• Listings planned on LSE, NGX, and FMDQ
Diplomatic Moves & Investor Confidence
Nigeria is currently engaging diplomatically with the U.S. to ease tensions involving:
• Religious freedom
• Security concerns
Analysts believe these efforts could help sustain foreign investor confidence in the coming months.
Outlook for the Domestic Bond Market
Cowry Asset Management expects:
• Continued bullish sentiment in local bonds
• Strong demand from pension funds, asset managers, and institutional investors
• Investors positioning ahead of the next primary auction
Supportive factors include:
• Expectations of moderating inflation
• Liquidity support from the CBN
Outlook for Eurobonds
The Eurobond market may remain subdued, weighed down by:
• Tightening global monetary conditions
• Stronger dollar
• Persistent geopolitical risks
• Risk-off sentiment in emerging markets
Eurobond performance will depend on:
• Global macroeconomic trends
• Investor appetite for emerging market debt