Benchmark Yield on Nigerian Bonds Falls to 16.68%
Nigerian government bonds rallied in the secondary market as investors look forward to fresh supply for Sept., with hope that disinflation will trigger yield repricing.
Investors continue to lock down yield on Federal Government of Nigeria (FGN) bonds with mixed expectation on spot rate pricing after midterm expenditure document revealed a preference for local borrowing.
Inflation is anticipated to decline further as the market expects the release of August consumer price index (CPI) by the National Bureau of Statistic (NBS) next week.
In the secondary market, FGN bond traders sustained its bullish momentum, driven by optimistic investor sentiment, leading to a 15 basis point decrease in the average yield.
Buy-side interest was concentrated on short-to-mid dated maturities and Long end remained steady as investors stayed cautious. Prices of these bonds increased, while average yield reduced to 16.68% from the prior session.
Trading activities were concentrated at the short-end (-25 bps) and mid-segment (-14 bps) of the curve – Notable papers on bid included the FGN bonds that will mature in 2029 and 2030
Investment firms reported that the average yield contracted at the short (-24 bps), mid (-22 bps), and long (-1 bp) segments.
Fixed income market analysts said the bonds were yield contraction was driven by the demand for the APR-2029 (-51bps), APR-2032 (-48bps) and JUN-2053 (-1bp) bonds, respectively.
#Benchmark Yield on Nigerian Bonds Falls to 16.68% First Holdco Drops by 5.6% on Negative Investors Sentiment
