Federal Bonds Yield Inches Higher Amidst Soft Selloff
The average yield on Federal Government of Nigeria (FGN) bonds ticked up slightly week on week amid soft selloffs in the secondary market.
In a note, Afrinvest Securities Limited said the market maintained a relatively steady performance, albeit with mixed sentiment, as investors focused on specific maturities and adjusted their investment durations accordingly.
As a result, the average benchmark yield recorded a marginal uptick of a basis point week on week, rising to 15.79% from 15.78% recorded the previous week.
Afrinvest Securities said yields at the short end dipped slightly by 1bp to 16.13%, showing that investors still favour instruments with shorter duration and better liquidity.
The mid-tenor segment, however, saw yields rise by 14bps to 16.38%, as seen in the 15-MAY-33 and 21-JUN-33 instruments, with average yields rising by 34bps and 29bps, respectively.
The yield and price movements pointed to some selling pressure and portfolio reshuffling, likely influenced by recent primary market auction results from the Debt Management Office.
Afrinvest Securities’ debt market analysts said at the long end, yields fell by 3bps to 14.77%. This was linked to a 27 bps yield contraction seen in the 21-JAN-42 bond, suggesting stronger demand for longer-dated bonds as investors look to secure current yield levels.
At its monthly auction in March, the Debt Office offered a total of ₦750.0 billion on the FGN AUG 2030, FGN JUN 2032, and FGN MAY 2033 instruments. All the offers were reopened bonds across 5-, 7 and 10-Year local bonds. FCMB Gains, Nears N800bn after Additional Shares Listing
