Nigerian Bond Yield Slides over Bargain Hunting
The average yield on Nigerian government bond slide in the secondary market over bargain hunting supported by an improved investors’ sentiment. Improved investor sentiment in the secondary market for FGN bonds led to a slight 3 basis point decline in average yields, bringing them downward.
Inflation fear and uncertainties that lie ahead continue to drive portfolio rebalancing efforts. Then, disinflation set in which caused real return on investors to reduce while the monetary authority kept rate at double digit high.
But then, investors’ appetite for the naira asset remained strong, with pension fund asset managers accounting for majority of investment in government bonds.
The latest rally was boosted by the new that Nigeria has comfortably settle its $3.4 billion covid -19 support from multilateral lender – the International Monetary Fund (IMF).
In the secondary market, the majority of the buying activity was dominant at the short and long end of the curve, where the JAN-26 paper recorded a 55bps moderation in yield.
Across the benchmark curve, the average yield contracted at the short (-11bps) end, driven by buying interest in the JAN-2026 (-55bps) bond, but was unchanged at the mid and long segments.
The Apr 2029s, Feb 2031s, May 2033s, and Jun 2053s saw the most interest during the session. With these selective trades, the benchmark mid-yield dipped to 18.70% by market close.
Fixed income market traders highlighted that the current market sentiment is likely to extend into tomorrow’s trading session. #Nigerian Bond Yield Slides over Bargain Hunting Lagos, BoI to Sign MoU to Improve SMEs Access to Finance
