Benchmark Yield on Nigerian Bonds Eased Ahead of Q1 Auction
The average yield on Nigerian government bonds steadied in the secondary market due to thin transaction records ahead of the primary market auction calendar. The market is currently expecting the Debt Management Office (DMO) to release local borrowing plans via bond sales in the debt market.
On Wednesday, the bond market experienced minimal activity, although mild bullish sentiment was observed at the JAN 26 (-38 bps) instrument. In its note, CardinalStone Securities Limited told investors that this led to a contraction at the short end (-3bps) of the yield curve, causing the average yield to ease slightly by 1 bps to settle at 19.78%.
The market attention was shifted to the Treasury bills auction conducted by the DMO on behalf of the Central Bank of Nigeria, where N515 billion was offered to local investors across standard tenors.
AIICO Capital Limited revealed that there was some demand for the April 2032 bonds, while offers were seen at the long end of the curve, particularly for the June 2053 bonds. However, there were wide bid/ask spreads Despite the quiet disposition in the secondary market, the near segment traded on a mixed note, TrustBanc Financial Group Limited told investors in its market update.
Traders explained that modest buying interest was seen on Feb-28 and Feb-31 maturities, with yields adjusting upwards by 1 bp to close at 22.05% and 20.18%, respectively. However, the decent buying interest on Jan-26 maturities pulled back the average benchmark yield by 1 basis point.
Investment firms expect similar market sentiment to persist. #Benchmark Yield on Nigerian Bonds Eased Ahead of Q1 Auction
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