Healthy foreign appetite seen for Kenya, Nigeria debt

High yields on Kenyan Treasury bills are expected to draw foreign investors at auctions next
 week, while slowing inflation in Nigeria should also encourage offshore participation in its bond market.
       
   KENYA
   Demand for Kenya's Treasury bills is expected to pick up in coming auctions as high yields attract foreign investors.

DMO DG, Nwankwo

   Yields on Kenya's short-term debt securities have risen steadily in recent weeks to about 10 percent as investors try to match high returns on the interbank lending market.
   "Whenever we see short term debt trading at double digits levels we always see offshore money coming in because of the decent returns, noting that inflation is still below those levels," said Duncan Kinuthia, head of trading at Commercial Bank of Africa.
   Kenya's year-on-year inflation  rose for the fourth straight month to 8.29 percent in September from 6.67 percent the previous month.
   The central bank aims to raise 7 billion shillings ($82.6 million) from the sale of 91- , 182-  and 364-day  Treasury bills next week.    
   
   NIGERIA
   Yields on Nigerian debt are expected to fall next week amid healthy foreign investor appetite following an end to the U.S. government shutdown.
   Nigeria offered 55 billion naira ($343.86 million) in 3- and 20 year bonds at a monthly auction on Friday.
   The results are expected to be released early next week.
   Traders said yields on local debt have fallen by around 60 basis points across the board since last week due to strong buying from offshore investors in the aftermath of the U.S. debt deal and as inflation in Africa's second biggest economy slows.
   Nigeria's consumer inflation fell to a fresh five-year low of 8 percent in September, down slightly from 8.2 percent in August, the National Bureau of Statistics (NBS) said on Wednesday
   "We expect to see more offshore interest in the local debt market and a further fall in yields next week," one dealer said.