Bonds, Treasury Bills Yields Gap Reach 200 Basis Points
In the secondary market, the gap between Nigerian government bonds and Treasury bill yields reached 200 basis points after disinflation reduced real return on investment in the market to 3.27%.
Headline inflation rose to 24.23% in March, versus a benchmark interest rate of 27.50%, which some analysts anticipate will remain at the current level as the Central Bank cannot afford to cut the rate.
In the bond market on Monday, minimal activity and limited offers were observed at the mid-segment of the curve. Hence, trading activity was tight as secondary market offers remained scarce.
Fixed income market analysts said while some bids emerged for the January 2035 bond, they found no matching offers. Trading activity concentrated primarily on the June 2053 and February 2031 maturities.
Overall volumes stayed low throughout the session. Across the benchmark curve, the average yield contracted at the short (-1bp) and mid (-3 bps) segments. The yield contraction was driven by buying interest in the JUL-2030 (-9bps) and FEB-2031 (-14 bps) bonds, respectively, but was unchanged at the long end.
The benchmark yield on Nigerian government bonds declined to 19.03% as investors continue to react to changing market dynamics ahead of the monetary policy committee meeting.
Also, the yield on Nigerian Treasury bills fell to 21.03% in the secondary market due to investors taking positions before the auction. #Bonds, Treasury Bills Yields Gap Reach 200 Basis Points Pension Fund Assets Grows to N23.366 Trillion
