Benchmark Yield on Nigerian Bonds Climbs to 19.31%

The FGN bond market opened the week quite calm, with the average yield ticking up by a basis points to print at 19.31%, traders said in a note. The selloffs happened in the secondary market amidst attention shifting primary auction.

Weak liquidity level in the financial market has continue to impacting trading directions, though investors have also started to weigh the impacts of disinflation on portfolios. 

On Monday, the Debt Management Office (DMO) was in the market to conduct its monthly auction sales. Traders said the primary market auction shifted investors’ attention amidst tight bonds supply.

Ahead of the auction, fixed income market investors had raised bets on federal government borrowing instruments on Friday. Analysts predicted the auction would be well received as supply of bonds has reduced to N200 billion from N360 billion.

This reflected on the trading pattern in the secondary market at the beginning of the week, Riskoff sentiment caused some selloffs witnessed across the tenors.

Analysts reported that across the curve, yields increased slightly at the short end (+2bps) due to selloffs on the MAR-25 FGN Bonds paper which gained 17 basis points.

However, the yield was unchanged at the mid and long segments due to thin transactions.

Overall, the FGN bonds market operated calmly because participants focused on today’s primary market auction. The average mid-yield ultimately settled at 19.26%.

“We expect investors to have mixed to bearish sentiments tomorrow after today’s FGN bond auction results”, AIICO Capital Limited said. # Benchmark Yield on Nigerian Bonds Climbs to 19.31%

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