Benchmark Yield on FGN Bond Rises Slightly to 18.76%
The benchmark yield on Federal Government of Nigeria (FGN) bonds rose slightly to 18.76% on Wednesday due to selloffs that was triggered by waning sentiment in secondary market.
Rates on Nigerian bonds have remained subdued as Debt Management Office (DMO), kept spot pricing tight amidst efforts to reduce government borrowing costs.
Negative interest yields has kept some alpha seekers away from Nigerian bonds, given that both inflation, and interest rates are in their double digit high range.
In the secondary market on Wednesday, Nigerian government witnessed mild selloffs or what some analysts call soft profit taking amidst unfulfilled expectation that debt office would repriced rates to match changing market dynamics.
Relatively lower spot rates offering in the past bonds auction caused yield to inverted giving a more juicy spot rates pricing by the Central Bank on Treasury bills auction sales.
While the bond secondary market was mostly calm yesterday, the average yield increased slightly by 1bp to 18.67%, separate analysts reported.
In its market update, Cordros Capital Limited stated that across the benchmark curve, the average yield expanded at the short (+4bps) end. The yield surge was supported by investors’ decision to offload the MAR-2025 FGN bond, which pushed it yield up by +11bps.
However, yield was unchanged at the mid and long segments. Thus, the average secondary yield stayed muted at 18.76%, despite yield expansions of 0.11% and 0.05% in the MAR-25 and JAN-26 FGN papers. #Benchmark Yield on FGN Bond Rises Slightly to 18.76%
