FGN Bond Yield Rises to 19.06% Ahead of Interest Rate Decision
The average yield on federal government of Nigeria (FGN) bonds climbed slightly in the secondary market ahead of the outcome of the Central Bank monetary policy committee decision.
Trading activity was largely muted, with yields remaining broadly unchanged across maturities as most players stayed on the sidelines ahead of the monetary policy committee rate decision.
In the secondary market, Nigerian bond yields expanded at the short end, mid segment, and long end of the curve by 7bps, 2bps, and 2bps, respectively.
Consequently, the average yield on FGN Bonds climbed by 4 basis points to 19.06%, reflecting light sell-offs concentrated around the short and belly segments of the yield curve.
Last week, the domestic FGN bond market traded cautiously following the announcement of a ₦300 billion, 7-year Sukuk issuance at a 19.75% coupon.
However, sentiment turned mildly bullish midweek, driven by strong demand for long-dated instruments such as the FGN 2034, 2032, and 2049 bonds, which recorded notable yield declines.
Investor confidence was further boosted by April’s inflation report, which showed a moderation in the Consumer Price Index (CPI) to 23.71% from 24.23% in March.
This spurred increased interest in the FGN 2033 bond toward the end of the week. As a result, the average benchmark yield declined by 5 basis points week-on-week to 18.81% #FGN Bond Yield Rises to 19.06% Ahead of Interest Rate Decision Digital Economy Attracts $191m Investment in Q1 2024 – Bosun Tijani
