Bond, Treasury Bills Mixed as Naira Holds Steady
The average yield on fixed interest securities, FGN Bond, Treasury bills and OMO Bills mixed as the Nigerian local currency, the naira, traded steadily against the United States dollar in the investors and exporters foreign exchange window.
Yields across tenored have surged after adjustment to interest rate pricing by the monetary authority. At the primary market, government agencies have been offering higher spot rates to attract market participants.
In the secondary market for trading Federal Government of Nigeria (FGN) bonds, traders said the values of plain vanilla FGN bonds were largely flat. Cowry Asset Management Limited in a market note said notably, investors traded at the front end of the naira yield curve.
Market analysts stated that the 23 Apr FGN Bond 2023, 14 Mar FGN Bond 2024, and 17 Mar FGN Bond 2027 debt instrument yields expanded by 0.06, 0.05, and 0.02 percentage points, respectively.
As a result, the average secondary market yield increased by 0.01 percentage points to 14.48% from 14.47% in the previous trading session due to selloffs.
Across the benchmark curve, Cordros Capital analysts stated that the average yield expanded at the short (+2bps) end following the sell-off of the APR-2023 (+6bps) bond. Conversely, the average yield was flat at the mid and long segments.
Similarly, the report stated that the value of the FGN Eurobond fell across all maturities tracked even as the average yield expanded by 0.05 percentage points to 14.17% amid bearish sentiment.
Amidst multiple pressures, the Nigerian naira traded flat against the United States dollar. At the investors and exporters FX window, the naira was exchanged at N446.00m according to data from FMDQ Exchange.
In the money market, short term rates moderated further, closing below double digits on the back of low funding pressures. Market data shows that the overnight lending rate contracted by 83 basis points to 9.0%. READ: Fixed Income Market Trades Mixed as MPC Holds Meeting
The open buyback rate fell further to 8.67% while the average yield in the Treasury bill secondary market remained flat at 11.12% following a thin trading session. Similarly, the average yield was flat at 10.2% in the OMO bill segment. # Bond, Treasury Bills Mixed as Naira Holds Steady