Benchmark Yield on FGN Bonds Steadies at 20.34%

Benchmark Yield on FGN Bonds Steadies at 20.34%

Nigerian bonds benchmark yield steadies at 20.34% in the secondary market as investors shifted attention to OMO bills auction. Also, investors have started trading cautiously ahead of inflation data release this weekend as market anticipate the rebased consumer price index would alter market dynamics.

Investors have been a bit bullish in the bond market this week, anticipating potential spot rates repricing at the Debt Management Office primary market auction for February. “If inflation comes down, there is likelihood that the monetary policy committee will switch from hawkish to dovish – which could be the end of policy tightening…

“If it happens that the monetary policy rate cuts benchmark interest due to rebased consumer price index data – yield in the fixed income will be affected”, analysts told MarketForces Africa in a chat. The secondary market for Federal Government of Nigeria (FGN) was relatively quiet with pocket of transactions spotted ahead of inflation data.

Amid the stillness, a few trades emerged, mostly concentrated at the mid end of the curve, traders said in an investors notes. The 2034 FGN Bonds saw mild sell-off, with offers passing through at 20%, according to TrustBanc Financial Group Limited.

There was limited demand around the mid-tenor segment, particularly for the February 2031 and January 2035 bonds. Across the benchmark curve, the average yield expanded at the mid (+1bp) segment, Cordros Capital Limited told investors in a note.

Fixed income market analysts said yield surged at the line due to the sell-off of the JUN-2033 (+4bps) bond. Meanwhile, the average yield remained unchanged at the short and long ends. Overall, yields at the bond market stayed flat at 20.34%. #Benchmark Yield on FGN Bonds Steadies at 20.34% CBN Opens FX Window for BDC to Stock up at NFEM Rate