Banks, Asset Managers Ramp Up Nigerian Bonds, Yield Sinks
The benchmark yield on Nigerian government bonds retraced as asset managers, and local deposit money banks with surging liquidity parked their free cash into debt papers.
According to fixed income traders, the local bond segment traded on a mixed note. However, the bulls outpaced the bears, as liquidity driven bids sustained the bullish run in the secondary market.
Most of the trades consummated were at the near and mid ends of the curve, analysts at TrustBanc Capital Limited said in a note to investors, adding that local banks looking to lock away idle funds positioned mostly in near-dated bills.
The Mar-27 maturity recorded the highest drop in yield (-24bps) due so investors increased bets on the curve, pulling the average benchmark yield down.
In its market note, analysts at AIICO Capital Limited said buying interest was recorded across the Feb 2031, May 2033 and Feb 2034 papers. A slew of fixed interest securities analysts are expecting that buoyant system liquidity will continue to support this trend in the sessions ahead.
Across the benchmark curve, the average yield declined at the short (-13bps) end, driven by demand for the MAR-2025 (-70bps) bill, but remained unchanged at the mid and long segments, Cordros Capital Limited said in its note to investors.
Due to the bullish direction in the secondary market, the average yield plunged by 0.04% to 19.45% at the end of trading session on Monday. The surge in demand was fueled by improved liquidity in the money market
The liquidity in the banking system opened the week with a healthy balance of ₦375.53 billion #Banks, Asset Managers Ramp Up Nigerian Bonds, Yield Sinks ECOWAS, ECOBANK Unveil Empowerment Programme for Women Traders
