Benchmark Yield on Nigerian Bond Rises to 19.70%
Trading activities on the Federal Government of Nigeria (FGN) bond ended on a bearish note in the secondary market, resulting in a 0.25% increase in the average yield.
In their separate market updates, traders said the benchmark yield inched higher due to sell pressures or profit taking activities witnessed across tenor instruments in the secondary market.
Yield hungry bond investors continue to reshuffle portfolios in a bid to optimsed return. Interest yield on Nigerian Government bond has been negative but strong enough to reduce banks appetite for creating credit.
According to fixed interest securities analysts, Nigeria has been borrowing from local debt capital market to augment budget 2024 shortfall by selling debt instruments to investors,
But liquidity concern remained an impediment to rates adjustment as local investors anticipate yield repricing in the fixed income market after monetary policy tightening.
Inflation and high interest rates environment has altered the financial market position. The debt management office, DMO, raised spot rates on 5, 7 and 10-Year FGN Bond sold to investors at its monthly primary market auction last week.
The authority has now raised N4.3 trillion out of N6.1 trillion local borrowing to support budget deficit for the year, MarketForces Africa reported.
In the secondary market, trading activities on Nigerian government bonds ended on a bearish note because investors’ trimmed interest in naira assets amidst uncertainties in the economy.
Traders said the market’s bearish sentiment was driven by sell-offs at the short (+30bps) and mid segments (+34bps) of the curve, particularly in the APR-29 (+124bps) and MAY-29 (+104bps) papers.
The domestic debt market has recently seen a shift, with lower borrowing amounts following a significant frontloading of debt in the first quarter of the year. Benchmark Yield on Nigerian Bond Rises to 19.70% NGX Rises by N112bn as Notore Chemical Lists Privately Sold Shares
