FGN Bonds Yield Climbs Slightly to 19.48% on Thin Trading
Trading activity on Federal Government of Nigerian (FGN) bonds remains subdued in the secondary market, keeping the benchmark yield little changed at 16.48% on Thursday.
The market saw subdued yield movements across benchmark maturities that pushed the average yield up slightly by a basis point. Lower supply and expectation of reduced spot rates have lowered transactions level in the secondary market.
Debt Management Office tight bonds supply and other market signals have forced investors to keep their portfolio build up intact.
Traders reported that trading activity was softer; fixed interest income investors have been opening and closing positions to optimise return on the naira assets.
Upward repricing was observed in the local bonds maturing 2029, 2031, and 2032 papers. Hence, their associated yields advanced to 15.90%, 16.85%, and 16.30%, respectively. Conversely, the FGN 2033 defied the trend, with yield rising by 10bps to 16.65%.
Wealth, and asset managers who have locked down yield on the naira asset keep their portfolio intact amidst sharp reduction in supply from the debt office.
Despite a quiet moment after the treasury bills auction on Wednesday, bond traders in the secondary market said they witness a bearish touch.
Across the benchmark curve, the average yield expanded at the short (+5bps) end, due to profit-taking activities on Nigerian government bond maturing in March 2037 (+33bps). Yield closed flat at the mid and long segments due to thin transaction. #FGN Bonds Yield Climbs Slightly to 19.48% on Thin Trading#
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