Foreign investors begin sell off on emerging market assets

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7 years ago

FOREIGN investors have continued to sell off on emerging market assets largely due to the strengthening dollar and higher Treasury yields which prompted foreign capital flow reversals from Nigeria and other emerging markets.

Across Sub-Saharan African (SSA) Sovereign Eurobonds, performance was already largely bearish. In Nigeria, some foreign portfolio investors in the fixed income market did not roll over their matured investments due to low yields and others in the equity market sold down their shares ahead of 2019 elections and political uncertainty.

Hence, players in the money market observed that yield on 25 of 29 instruments under coverage coverage rose, when compared on weekly basis. Average yield across the Nigerian, Ghanaian, Gabonese, Ivorian, Kenyan, Zambian and Senegalese Eurobonds rose 20 basis points (bps), 30bps, 40bps, 20bps, 30bps, 100bps and 10bps W-o-W respectively.

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The only buy interest noticed in the week was on the South African Instruments as yields trended lower. Notably, as opposed to the positive performance in 2017, all SSA sovereign Eurobonds currently have a negative year to date (YTD) price return with the ZAMBIA 2024 (-18.3%) instrument declining the most while the NIGERIA 2018 (-1.2%) has the best YTD return.