FGN Bonds Benchmark Yield Slides to 13.51%
The benchmark yield on Federal Government of Nigeria (FGN) bonds declined as investors increased their market position on the naira asset.
Fixed income traders said benchmark yield dropped to 13.51% due to buying momentum spotted across Bonds tenors in the secondary market.
Trading activities in the fixed income market have been bullish for most of the New Year as assets/fund managers redesigned portfolio strategies in line with the changing market dynamics.
The secondary space has recorded large and sustained buying momentum ahead of the implementation of the government borrowing plan to finance its spending plan for the year.
The authority has indicated a plan to raise money from the debt capital market in addition to foreign borrowings.
Traders at Cowry Asset Limited said in an update that market activity was slightly positive yesterday, particularly attributed to a yield reduction of 92bps in the MAR-24 FGN paper, thus dragging the average yield by 0.21% to close lower at 13.51%.
The World Bank projected Nigeria’s economy will grow by 3.3 per cent this year, about 0.4 percentage points higher than the 2.9 per cent it is expected to have closed last year.
The projection is slightly behind that of sub-Saharan Africa (SSA), which is to expand by 3.8 per cent but far modestly above the estimated global average (2.3 per cent).
In its market note, Cordros Capital said across the benchmark curve, the average yield dipped at the short (-22bps), mid (-4bps) and long (-30bps) segments. Dangote Reacts to EFCC Visit to Headquarters
Traders attributed the decline to fixed income investors’ interest in FGN Bonds MAR-2024 (-92bps), JUN-2033 (-12bps) and APR-2037 (-68bps) bonds.
