Eurobonds Weaken on Risk-Off Sentiment as DMO offers N200bn across maturities

• As Bond Market Average Yields rise 8bps
• Investor sentiment remains Fragile

BY BONNY AMADI

The Nigerian secondary bond market witnessed a mixed performance in the week under review, as investors displayed mild buying and selling interest across various tenor segments.

This cautious trading pattern contributed to a modest 8bps increase in the average yield, settling at 16.70 per cent.

Market sentiment remained largely conservative, reflecting the impact of tight system liquidity and the absence of strong primary market triggers to drive significant positioning.

In contrast to the domestic bond market, the Nigerian sovereign Eurobond segment ended the week on a bearish trajectory, weighed down by broad-based selloffs across the curve. Investor sentiment remained fragile, as lingering concerns around the global interest rate environment, tighter financial conditions, and sustained risk off positioning in emerging and frontier markets dampened demand.

Consequently, average Eurobond yields rose by 16bps week-on-week to 8.12 per cent. The uptick in yields highlights the cautious tone among offshore investors, who continue to reassess Nigeria’s external debt profile against the backdrop of global market volatility and shifting appetite for high-yield assets.

Meanwhile in the new week, the DMO is scheduled to auction N200 billion across maturities. It is anticipated that the auction would attract strong subscription levels, with demand expected to remain positive, while stop rates may rise marginally in response to market conditions.