Pedestrians cross a street near advertising posters in Nairobi. Kenya, with 41 million people and a gross domestic product of $55 billion, is the biggest economy in East Africa, with tea, coffee and tourism among its main sources of foreign exchange. Photographer: Trevor Snapp/Bloomberg
Paul Wallace – David Malingha
(Bloomberg) — Investors skittish about Nigerian assets as plunging oil prices pummel the West African nation’s economy are casting their eyes across the continent to Kenya.
Yields on Kenya’s 10-year Eurobonds, which were 128 basis points higher than comparable Nigerian debt when they were sold in June, are now 56 basis points lower, according to data compiled by Bloomberg. The East African nation’s local-currency securities have returned 0.6 percent in dollar terms this year, compared with an 8.2 percent loss on naira debt, Bloomberg indexes show.
The World Bank raised its growth forecast for Kenya on March 5, saying oil prices that have tumbled 48 percent since June would boost the economy of the nation, a net importer of crude. By contrast, Nigeria is set to slow, the International Monetary Fund said the same day. The continent’s biggest oil producer is struggling with falling export revenue and a loss of investor confidence after it postponed elections amid the insurgency by the Islamist group Boko Haram in the country’s northeast.READ MORE