Subdued Interest in Nigerian Bonds Pushes Yield to 15.64%
Risk-off sentiment in the secondary market drove the average yield on Federal Government of Nigeria (FGN) bonds higher by 4 basis points (bps) on Thursday, traders said in separate reports.
The market was greeted with negative sentiment despite surplus liquidity level in the financial system at the trading hours and a couple of pieces of good news, including economic growth and disinflation.
A similar experience ensued in the Treasury bills space, suggesting portfolio investors are rotating assets based on the risk profile and yield expectations.
While the treasury bills provide inflation-protected returns, bond rates are relatively lower, but positioning has been heavy due to their tax advantage.
On Thursday, bearish bias persisted in the bond market, with activity concentrated at the mid-segment (+7 bps) of the curve. These include FGN bonds that will mature in 2029, 2030, and 2031, according to CardinalStone Securities Limited
Given the negative sentiment, the average yield rose by 4 basis points to 15.64%, reflecting weakened domestic investor confidence in local fixed-income assets.
The mild sell-side tilt dragged bond prices lower, but quotes remained broadly stable across most maturities amid subdued activity.
Traders reported that the mid-segment saw significant repricing driven by the prior day’s Treasury bills auction results and the newly released Nigerian Treasury bills auction calendar.
According to AIICO Capital Limited, yields on the 20-Nov-2029, 23-Jul-2029 and 21-Feb-2031 FGN bonds rose significantly by 19 bps (16.02%), 42 bps (16.27%) and 62 bps (16.49%), respectively.
Meanwhile, yield on the 22-Jan-2026 and 20-Mar-2026 FGN Bonds eased by 2 bps and 4 bps to 16.31% and 16.28%, respectively. Transcorp Hotels Navigates Sharp Price Correction, Slumps by 10%
