A Review of the Nigerian Energy Industry

Nigeria’s 5-year bond yield drops

Naira notes.
Naira notes.

01 April 2015, Lagos – Nigeria’s five-year bond yield fell 33 basis points on Tuesday after a United States investor bought government debt, with uncertainty surrounding presidential elections in Africa’s biggest economy easing, a dealer at a major commercial bank told Reuters.

The yield on the 2019 bond initially fell two basis points in early trades on Tuesday, the dealer said, adding that the debt fell further on large buying from the offshore fund.

Reuters reported that the five -year paper traded at 15.03 per cent from 15.36 per cent the previous Nigeria’s foreign exchange reserves fell by 4.9 per cent to $29.79 billion by March 30, from $31.35 billion a month earlier, updated data from the central bank showed on Tuesday.

The reserves of Africa’s top crude oil exporter and biggest economy fell 21.3 per cent by March 30 from $37.83 billion last March, the data showed with a total of N8.6 billion traded, the dealer said.

Yields on $500 million of Nigerian dollar bonds due July 2023 had fallen for the eighth day on Tuesday, to the lowest since December 10.

Investors encouraged by the lack of violence are taking “early positions” in anticipation prices will rise, Ayodeji Ebo, head of research at Afrinvest West Africa Limited had told Bloomberg.
“They are trying to increase their exposure, knowing that if there’s no post-election violence the only direction for the market will be upwards.”

The election, a key test of stability in Africa’s largest oil producer, produced a former military ruler Muhammadu Buhari, 72 as winner on Tuesday.

There was no evidence of a systematic manipulation of the process in the latest elections, an EU observer mission said in preliminary findings. Violence in Rivers state shouldn’t place the overall integrity of the election in doubt, the EU observer said.

Yields on the 2023 Eurobonds fell 4 basis points to 6.47 per cent on Monday. Rates on N489 billion ($2.5 billion) of bonds due March 2024 fell 37 basis points, to 15.38 per cent, the lowest since February 9, according to data from the Financial Markets Dealers Association.

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