FGN Bonds Yield Inches Higher to 12.71%

FGN Bonds Yield Inches Higher to 12.71%

Federal Government of Nigeria (FGN) bonds experience selloffs in the secondary market, pushing the average yield to 12.71% ahead of a large borrowing plan for the fiscal year 2023.  Nigeria plans to ramp up debt in the new year to close the fiscal gap.

A slew of fixed income analysts said in their market notes that the prices of FGN bonds remained relatively stable for most maturities, though there was a selling rally at the long end of the curve on Monday.

Accordingly, the average secondary market yield rose by three (3) basis points to 12.71%. Across the benchmark curve, Cordros Capital said the average yield contracted at the short (-2bps) end as buying interest in the APR-2023 (-8bps) FGN bond.

However, yield expanded at the mid (+8bps) and long (+7bps) segments following the selloff on the APR-2032 (+16bps) and JUL-2034 (-29bps) bonds, respectively.

Traders at Cowry Asset Management said in a market note that the yield on 20-year paper increased by 143 bps (1.43%) to 14.77%. Meanwhile, the yields on the 10- year, 15-year, and 30-year bonds stayed steady at 12.59%, 13.50%, and 14.15%, respectively.

Elsewhere, the value of the FGN Eurobond increased for the bulk of the maturities tracked amid renewed bullish sentiment. Consequently, the average secondary market yield plunged by 49 bps to 10.99%.

Elsewhere, the Nigerian interbank borrowing rate moved in mixed directions, although short-term benchmark rates, such as the open repo rate and the overnight lending rate, decreased to 10.17% and 10.83%, respectively. #FGN Bonds Yield Inches Higher to 12.71%

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