Nigeria’s $2.35 Billion Eurobond Sale
This week, Nigeria made a big comeback on the global financial stage by successfully raising $2.35 billion through a Eurobond sale. The response from investors was overwhelming — over $13 billion worth of orders came in, which is more than five times what the country planned to raise.
A Eurobond is a type of bond that a country or company issues in a foreign currency, not its own. For example, when Nigeria issues a Eurobond in U.S. dollars, it means Nigeria is borrowing money from international investors and will repay them in dollars, not in naira.
According to the Debt Management Office (DMO), the funds were raised through two sets of bonds:
- $1.25 billion maturing in 2036 (10-year bond) with a yield of 8.6%
- $1.10 billion maturing in 2046 (20-year bond) with a yield of 9.1%
This marks the largest Eurobond order Nigeria has ever received. Investors ranged from fund managers, pension funds, and insurance companies to banks and hedge funds. They came from all over — the UK, North America, Europe, Asia, the Middle East, and even Nigeria.
The bonds will be listed on the London Stock Exchange, FMDQ Securities Exchange, and the Nigerian Exchange (NGX), making them available for trading locally and internationally.
The DMO explained that the money raised will be used to fund the 2025 fiscal deficit and support the government’s other financing needs.
Meanwhile, Nigeria’s foreign reserves continue to grow despite a slight weakening of the naira from ₦1,427.5/$1 to ₦1,438.5/$1. Reserves rose to $43.32 billion, up from $43.17 billion the previous week — a 6% increase since the start of the year.
Overall, the successful Eurobond sale and stronger reserves suggest renewed investor confidence in Nigeria’s economy and a positive outlook for the months ahead.
Equities Market Update
Nigerian Stock Market Ends the Week Lower
The Nigerian stock market closed the week on a negative note as the NGX All-Share Index fell by 2.99%, ending at 149,524.81 points. Market capitalization also dropped to ₦94.99 trillion.
Interestingly, trading activity picked up this week — total shares traded rose to 2.95 billion units from 2.50 billion the previous week. However, the value of shares traded fell to ₦93.20 billion, down from ₦117.77 billion the week before.
Across sectors, performance was mostly weak:
- Insurance: Down 7.56%, dragged by a 21% loss in Sovereign Insurance (SOVERNINS)
- Oil & Gas: Fell 4.80% as Oando (-17%) and Total (-10%) faced heavy selling.
- Banking: Declined 3.85%, with profit-taking in Zenith Bank (-7.69%) and UBA (-9.09%).
- Consumer Goods: Dropped 2.54% following a 10.82% fall in Nestlé Nigeria.
- Industrial Goods: Slipped 1.09%, weighed down by losses in Dangote Cement (-9.79%) and BUA Cement (-8.07%).
Overall, it was a bearish week for Nigerian equities, as profit-taking and weak investor sentiment pulled most sectors lower.
Fixed Income Update
Money Market Liquidity Improves as Rates Ease Slightly
System liquidity — the amount of cash available in the financial system — rose this week, opening the final trading day at ₦3.91 trillion, up from ₦2.47 trillion the previous week.
Because of this improved liquidity, short-term interest rates edged lower:
- The Overnight rate (ON) closed at 24.79%, slightly down by 0.07%.
- The Open Repo Rate (OPR) stayed flat at 24.50%.
Treasury Bills (Primary Market)
During Wednesday’s auction, the Central Bank of Nigeria (CBN), through the Debt Management Office (DMO), offered ₦650 billion worth of Treasury Bills. Investor demand was very strong, with total bids reaching ₦1.17 trillion, mostly for the 364-day bill, which was heavily oversubscribed.
Despite this strong demand, only ₦546.24 billion was eventually sold. The stop rates (interest rates at which bids were accepted) moved as follows:
- 91-day bill: remained unchanged to close at 15.30%
- 182-day bill: remained unchanged to close at 15.50%
- 364-day bill: fell to 16.04% (-0.10%)
Secondary Market
The NTB space equally exhibited mixed trading sentiments within the week. However, bullish pressures dominated the Treasury bills space supported by the robust liquidity position throughout the week.
In the NTB (Treasury Bills) market:
- 3-month yield: fell by 0.56% to 16.23%
- 6-month yield: fell by 0.14% to 17.23%
- 1-year yield: fell by 0.22% to 18.34%
In the bonds market, activity was also subdued, with a few selloffs in shorter-term bonds.
3-year, 5-year, and 7-year bonds saw yields rise slightly to 15.89%, 15.87%, and 15.71%, respectively. Longer-term bonds remained unchanged.
Overall, liquidity conditions improved, investor demand for short-term government securities stayed strong, and yields generally moved lower across the market.
Market Outlook for the Coming Week
Equities
Next week, investors are likely to take advantage of recent price dips by buying into strong stocks that declined this past week. However, some large institutional investors may continue to sell, keeping parts of the market under pressure. Overall, attention will also shift toward upcoming macroeconomic data, which could influence market sentiment and trading direction.
Fixed Income
In the fixed income space, the high level of liquidity in the financial system is expected to keep buying interest strong in the coming week. However, this activity may remain measured, as the Central Bank of Nigeria (CBN) is likely to continue its efforts to absorb excess liquidity from the market through open market operations.
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