Benchmark Yield on Nigerian Bonds Falls to 15.76%
The benchmark yield on Federal Government of Nigeria (FGN) bonds fell slightly to 15.76% in the secondary market amidst mixed expectations ahead of inflation, interest rate outlook and November supply.
With investors’ interest concentrated at the short end and belly of the curve, the average yield on Nigerian government bonds eased slightly ahead of inflation. Trading activity was relatively subdued as asset managers, pension fund administrators and other market players search for action points.
Local bonds demand was focused on short- to mid-term maturities while Long-dated papers held firm amid limited trading interest. Inflation is expected to drop below 18% and the market expects the monetary policy committee of the Central Bank to axe benchmark interest rate later in the month.
The market dynamics will keep investors guessing whether spot rate on local asset will reduced, but past auctions results signal things could be different after all. Broadly, investment banking firms are anticipation rates repricing, especially with recent external funding raise.
Fixed income market analysts told MarketForces African in chat that key economic indicators movements signal slowdown in premium in assets pricing. While seeking to lock in yield in anticipation of rate cut, Bonds buying was subdued in the secondary market due to cautious trading.
Hence, the average yield is declining 1 bp to 15.76%, underscoring mixed investors sentiment in domestic sovereign securities as participants seek attractive returns in the local debt market.
Market conditions are expected to remain broadly stable as investors continue to assess direction and await clearer catalysts, TrustBanc Financial Group Limited said in a note.
Last week, the FGN bond market recorded gains, with average yields easing 12 bps week on week to 15.77% p.a., driven by interest in short- to mid-term maturities (2026–2034), even as the long end of the curve remained flat at 15.55% p.a.
Overall, market sentiment reflected steady demand for fixed income assets amid robust system liquidity and attractive yields. # Benchmark Yield on Nigerian Bonds Falls to 15.76% Nigeria’s External Reserves Provide 11-Month Import Cover – CBN
