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Nigeria 10-Year Bonds Gain as Trading Starts on JPMorgan Indexes

Nigeria’s 10-year bonds gained on the first trading day after their inclusion in JPMorgan Chase & Co.’s global emerging market benchmark indexes, pushing yields lower.

Yields on the 16.39 percent bonds maturing January 2022 dropped 16 basis points, or 0.16 percentage points, to 12.66 percent, according to today’s prices published on the Financial Markets Dealers Association website.

The most-traded bonds maturing in March 2014, October 2019 and January 2022 will join JPMorgan’s GBI-EM indexes between Oct. 1 and Dec. 3, Giulia Pellegrini, the bank’s London-based sub-Saharan Africa economist, wrote in a note to clients Sept. 25. JPMorgan first disclosed the plans in August after central bank Governor Lamido Sanusi’s decision last year to attract more funds by removing restrictions on foreign investors holding debt of Africa’s biggest oil producer.

Yields “will probably drift lower in coming weeks on the back of the foreign demand and as local institutional investors and banks seek to increase their duration exposure,” Samir Gadio, an emerging markets strategist at Standard Bank Group Ltd. in London, said in an e-mailed reply to questions today.

The naira, which has been devalued twice by the central bank since 2008 because of falling oil prices and import demand, has strengthened 3.1 percent this year, the best performer in Africa, according to data compiled by Bloomberg.

While inflation in Nigeria slowed to 11.7 percent in August from a high this year of 12.9 percent in April, it is still above the central bank’s 10 percent target.

To contact the reporter on this story: Chris Kay in Abuja at ckay5@bloomberg.net

To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net

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