Bonds Yield Steadies on Investors Apathy
Trading activities on Federal Government of Nigeria (FGN) bonds were steady in the secondary market due to sustained investors’ apathy. Nigerian bonds market has seen lack of optimism among bondholders, traders due to widening negative interest yield on naira assets.
Pension Act and expectation for yield repricing apart from liquidity level in the financial system has been major drivers and factors that keep market participants glued to the space.
Some analysts believe that debt management tight fisting on rates pricing is deliberate financial repression in an effort to reduce Federal Government debt servicing costs from local borrowings.
While interest rate hikes narrowed real return gap, the debt office has remained cautious with bonds rates pricing versus the monetary authority.
Cordros Capital Limited told investors that across the benchmark curve, the average yield increased slightly at the short (+1bp) end,
The yield expansion was attributed to sell pressures on the MAR-2025 FGN bonds whose yield rose +2bps. On the other hand, yield closed flat at the mid and long segments.
Elsewhere, the value of FGN Eurobonds decreased for most maturities due to bearish sentiment. Consequently, the average secondary market yield increased to 10.21%.
Traders said with mild activity noticed on few maturities, the average mid-yield steadied at 18.73%. #Bonds Yield Steadies on Investors Apathy
