Benchmark Yield on Nigerian Government Bonds Falls to 15.79%
The average yield on Nigerian government bonds fell by 3 basis points (bps) on Thursday in the secondary market as investors increased their position ahead of November supply.
The local bonds market ended Thursday positively, with average yields declining 3 bps to 15.79%, demonstrating robust investor demand for domestic sovereign securities.
Risk averse investors seeking attractive returns in the local debt market have continue to boost their positions in anticipation of Nigeria’s benchmark interest rate cut in latter part of the month.
Inflation is expected to fall below 18% based on Broadstreet analysts’ consensus, and the disinflation and firmer local currency have become core drivers of the monetary policy dovish stance.
Investors focused mostly on the short to mid tenor papers. Notably, short-term papers like 2027s, 2028s, and 2029 saw yields decline to 15.83%, 15.90%, and 15.88%, respectively.
Meanwhile, moderate selling activity in the mid-tenor papers pushed yields on the 27-Apr-2032 and 2033s issues up by 4bps and 5bps to 15.83% and 15.78%, respectively.
Trading at the long end remained relatively quiet. Overall, the average benchmark yields slipped by 3bps. Market sentiment is expected to turn bullish throughout the week as investors react to the lower 1-year Nigerian Treasury bills (NTB) stop rate.
With robust liquidity, the market anticipates fixed interest securities to rally till week close as investors continue to lock in yields. At the midweek Treasury bill auction, the Central Bank cut spot rate on 364-day bill by 10 basis points to 16.04%. Fidelity Bank: Analysts See 84% Upside on New Target Price
