Benchmark Yield on Nigerian Bonds Rises to 18.47%
The benchmark yield increased as investors’ trimmed interest in Nigerian government bonds in the secondary market amidst an inflation rate slowdown announcement.
The latest rebased Consumer Price Index (CPI) report from the National Bureau of Statistics (NBS) showed that headline inflation slowed for the second consecutive month, easing to 23.18% year-on-year in February, down from 24.48% in January.
Following the release of inflation data, the local bond market remained bearish, with offers concentrated around the midpoints on Monday.
Trading activity was primarily focused on the February 2031s, May 2033s, and February 2034 papers amidst portfolio rebalancing. Asset managers and other market players found opportunities at the mid-end of the yield curve, seeking to lock in favourable yields.
TrustBanc Financial Group Limited told investors that decent selling pressure was seen at the short-section, where investors offloaded positions, particularly on the 2029 bond.
At the same time, demand for the 2034 maturity provides a cushion against the selling pressure. Across the benchmark curve, the average yield expanded at the short (+1bp) and mid (+2bps) segments due to sell pressures on the JUL-2030 (+5bps) and FEB-2031 (+7bps) bonds, respectively.
However, the local bond yield remained unchanged at the long end of the curve in the market due to thin trading activity. Overall, average benchmark yield increased by a basis point to close at 18.47%. The Debt Management Office announced the March 2025 auction offering, replacing the February 2031 paper with the May 2033 paper.
The Debt Office will be offering ₦200 billion on the April 2029 paper and ₦100 billion on the May 2033 paper for subscription next week. Spot rates are expected to adjust due to inflation slowed on expectation that demand will remain strong. #Benchmark Yield on Nigerian Bonds Rises to 18.47%…NGX is Bleeding, Equities Investors Exiting Positions
