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Published On: Mon, Feb 20th, 2017

Foreign Investors Scoop Nigeria’s Eurobond

(Vanguard) For the second consecutive week, Nigeria’s Eurobonds traded on the London Stock Exchange appreciated in value as foreign investors intensified demand for the nation’s debt instrument. The five-year, 5.3% $500 million JUL 12, 2018, appreciated by $.40 (yield fell to 5.29 per cent). Also, the 10-year, 6.38% $500 million JUL 12, 2023 appreciated by $.71 (yield fell to 6.09 per cent). However, the 10-year, 6.75 % $500 million JAN 28, 2021 lost $19 (yield rose to 3.74 percent). This trend, according to analysts at Cowry Assets Management Company Limited, a Lagos based investment firm, is expected to continue this week.
The renewed interest in Nigeria’s Eurobond on the LSE is one of the fallouts of success recorded in the $1 billion Eurobond issued by the federal government two weeks ago. Prior to the issue, there was investor apathy to the country’s Eurobond on the LSE, resulting in two consecutive weeks of decline in prices. This trend was, however, reversed following the federal government’s road-show for the Eurobond issue which featured presentations that revived investor’s confidence in the nation’s economy and hence the 800 percent oversubscription to the $1 billion Eurobond issue. Similarly, performance of Nigerian Corporate Eurobonds was also broadly bullish as instruments enjoyed some positive sentiments on the domino effect of the successful issuance of the $1.00bn Nigerian Eurobond last week. The FIDELITY 2018 received the most interest as yield dropped 55 basis points (bps) followed by the GUARANTY 2018 (-33bps) and FIRST BANK 2021 (-32bps) instruments. Nevertheless, the DIAMOND 2019 remains the best performing with YTD return of 13.1 per cent.

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