Nigeria’s Inflation-Protected Bond Yield Drops to 15.4%
In the secondary market for Nigerian government bonds, trading activity was mixed as investors evaluated their portfolios against targets.
The average benchmark yield decreased by 29 basis points, closing at 15.44% on Thursday, in a debt market with a favourable real return on the naira curve.
Despite moderating interest rates, investors remain attracted to solid yields, bolstering the appeal of the naira curve, which offers inflation-protected returns.
Most transactions in the secondary market were focused on the mid-range of the curve, with mild demand seen for bonds maturing on April 27, 2032 (-19bps) and May 15, 2033 (-14bps).
Fixed income market analysts noted a surge in offers for the 17-Apr-2029 (+10bps) and the 18-Jul-2034 (+19bps) maturities, which exceeded demand.
Overall, mid-range yields closed between 15.20% and 16.50%, according to Anchoria Securities Limited. Analysts at AIICO Capital reported selective buying interest across various curve segments, though this was countered by light selling pressure, leaving several benchmarks unchanged.
At the short end, the 20-Mar-2027 and 21-Feb-2031 maturities fell by 1 basis point each, settling at 15.96% and 15.78%, respectively, while other maturities remained stable.
In the mid-segment, the 17-Apr-2029 bond saw its yield rise by 11 basis points to 16.01%. Conversely, the bonds maturing on April 27, 2032, and May 15, 2033, experienced significant compressions of 18 bps and 14 bps, closing at 15.60% and 15.59%, respectively.
Further along the curve, the 21-Feb-2034 and 18-Jul-2034 bonds recorded yield increases of 7 bps and 19 bps, respectively, settling at 15.59% and 15.68%, while longer-dated instruments remained unchanged.
Overall, the average benchmark yield dropped by 29bps to close at 15.44%. Analysts at Anchoria Securities anticipate that demand for mid-tenor instruments will remain robust in the near term, suggesting that demand and supply dynamics will continue to influence yield movements. Nigeria’s Yields Rise as Investors Dump OMO, Treasury Bills
