FGN Bonds Yield Rises to 15.6% as Prices Fall
Patience Oniha, DMO DG

The Federal Government of Nigeria’s (FGN) local bond prices declined as a result of selloffs witnessed in the secondary market. At the close of the trading session, yield rose to 15.6% as financial markets turned bearish amidst uncertainties.

There was mild interest in some selected mid and long-dated maturities leading to a slight increase of 26 basis points in the average secondary market yield, settling at 15.58% Cowry Asset Limited said in its market update. 

Corroborating the development in the bond market, Cordros Capital Limited told investors via email that across the benchmark curve, its fixed interest securities traders saw the average yield increase at the short (+108bps) end.

Market analysts attributed that development to profit-taking activities on the MAR-2024 (+649bps) bond but dipped at the long (-5bps) end. Investors demanded for the JUN-2053 (-46bps) bond. Meanwhile, the average yield closed flat at the mid-segment.

At the debt management office bond auction at the end of January,  the authority offered N360 billion but raised N418.2 billion through re-openings of the 16.29% FGN MAR 2027, 14.55% FGN APR 2029, 14.70% FGN JUN 2033, 15.45% FGN JUN 2033, 15.45% FGN JUN 2038.  

The bids were allotted at the marginal rates of 15.00%, 15.50%, 16.00%, and 16.50% respectively , though bid-to-cover ratio decline to 1.45x from 3.24x recorded in the December auction. 

#FGN Bonds Yield Rises to 15.6% as Prices Fall Exchange Rates Diverge as FX Supply Sinks 3.5%