OCTOBER 6, 2017 – Expectations for improved economic stability in Nigeria and globally have encouraged BlackRock to move into the country’s local currency bonds as part of efforts to raise performance in its bond offerings, the firm’s head of emerging markets fixed income said on Thursday.
BlackRock favors Nigeria as well as oil producers such as Russia, Colombia and Kazakhstan, the company’s Sergio Trigo Paz said in an interview, highlighting the West African country as one where he is planning to enter local markets.
“We are moving into some countries even deeper because we feel that the macro environment is much more stable than it was and likely to improve going forward,” Trigo Paz said at the New York headquarters of the world’s largest asset manager.
“With regard to sub-asset classes, local markets are still the place to be,” he added, noting that he expects the U.S. dollar to be less of a driver for local market returns.
Investors have been piling into Nigerian bonds due to high yields and stable currency for investors especially as an improving inflation outlook may mean that yields could start to decline.
A Treasury bill auction on Wednesday was four times oversubscribed, with Nigeria’s Debt Management Office selling one-year government bonds at 15.72 percent, lower than the 17 percent it paid at the last auction. It also reduced the rate it paid for the 182-day bill to 15.49 percent.