FGN Bond Yield Rises to 16.73% as Investors Trim Holdings
The average yield on the Federal Government of Nigeria (FGN) bond increased by four (4) basis points (bps) in the secondary market as investors trimmed their holdings on changing sentiment ahead of monthly supply.
Bonds yields fluctuated after rates were repriced at December auction conducted by the Debt Management Office (DMO), where spot rates on reopened 5- and 7-year local papers were adjusted upward.
The higher bond spot rates mirrored development in the treasury bills segment, where the monetary authority offered higher returns on short-term investment securities to attract investors.
Selloffs were observed at the mid-segment of the curve, where average yield expanded by 13 bps. Consequently, average yields expanded 4bps to settle at 16.73%.
AIICO Capital Limited said sell pressure was more pronounced across select mid- to long-dated maturities, while activity at the short end remained largely muted. On the short end, mild buying interest was seen on the 22- Jan-2026 and 20-Mar-2026 bonds.
Also, selling pressure intensified further along the curve, particularly on the 28-Nov-2028 and 17-Apr-2029 bonds, which recorded notable yield expansions of 19 bps and 29 bps, respectively.
Additional weakness was evident on the 25-Jun-32, 15-May-33, and 21-Jun-33 papers, with yields rising by between 28 bps and 37 bps. This mixed performance drove the average benchmark yield marginally higher by 4 bps to close at 16.73% from a previous 16.69%.
The market is to trade cautiously in the next session amid profit-taking. #FGN Bond Yield Rises to 16.73% as Investors Trim Holdings. Naira Climbs to N1,418 as Foreign Reserves Hits $45.623bn
