FGN Eurobond Yield Spikes to 8.04%, Naira Steadies
The average on Federal government of Nigeria (FGN) Eurobond spikes 24 basis points as sell pressures hit the space in a move by traders to rebalance their books. Meanwhile, the Nigerian naira trades steady at N417 Investors and Exporters FX window midweek.
Money market rates adjusted upward amidst funding pressures that have worsened liquidity position in the financial system. Data from the FMDQ Exchange shows that the average interbank rate climbed by 117 basis points to close at 12.50% midweek as both open buy back and overnight lending rates rise.
Today, the Open Buy Back rate climbed by 1.33 percentage points while the Overnight rate inched up by 1.00 percentage points to close at 12.33% & 12.67%, respectively following outflows for the FGN bond auction settlement worth N297.01 billion.
In the Nigerian Treasury Bills secondary market, trading activities ended on a quiet note as the average rate remained flattish at 3.17%. Investors have seen spot rates dropping since the beginning of the year due to high subscriptions as investors hunt for treasures.
Similarly, the average yield was flat at 3.6% in the OMO segment.
Elsewhere, the bonds segment faced selling pressures which have continued to lift the average yield upward. Traders’ notes show that activities at the FGN bond secondary market traded on a calm note.
Although, analysts spotted a bearish undertone, as most of the traction was seen at the short end of the curve, according to Alpha Morgan Capital. Due to the sell-down in the secondary market, the average yield climbed by 4 basis points to close at higher at 10.64%.
In a market note, Cordros Capital analysts hint that across the benchmark curve, the average yield expanded at the short (+12bps) and long (+1bp) ends as investors sold off the MAR-2024 (+62bps) and MAR-2036 (+9bps) bonds, respectively but were flat at the mid-segment.
Amidst uncertainties in the economy, activities at the FGN Eurobond market was mostly bearish today following sell-side pressures across the sovereign curve except for the Jun-2022 instrument that witnessed some demands.
As a result of the exit trades experience at the international debt capital secondary market, the average yield was up by 24 basis points to close at 8.04%, according to Alpha Morgan Capital. #FGN Eurobond Yield Spikes to 8.04%, Naira Steadies
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