FGN Eurobond Yield Prints at 10.5%, T-Bills, Local Bonds Steady
Federal Government of Nigeria (FGN) Eurobond yield tracks lower, albeit, above 10% on Monday as the local fixed income market awaits catalysts to drive yielding repricing in the second quarter of the financial year 2022.
Meanwhile, the average yield on Nigerian Treasury Bills, FGN bonds and open market operations (OMO Bills) were steady on Monday following investors’ apathy in the fixed income market.
The average yield was flat at 3.6% in the OMO segment on Monday after the Central Bank of Nigeria (CBN) failed to float OMO last week. Consequent to thin trading recorded in the space, yields were flattish across the curve while the financial system liquidity opens on a solid note in the money market.
Traders said due to the absence of funding pressures, the average interbank rate dropped by 117 basis points on Monday to close at 4.75%. Data from FMDQ Exchange shows that the Open Buy Back and Overnight rates both dipped by 117 percentage points to close at 4.50% and 5.00%, respectively.
Today, activities at the NTB secondary market traded on a calm note and the average rate remained flat yet again to close at 3.17%. Also, activities at the FGN bond secondary market traded on a calm note, with pockets of trade seen along the yield curve, according to Alpha Morgan Capital.
Across the benchmark curve, the average yield contracted at the short (-2bps) end as investors demanded the APR-2023 (-6bps) bond; but inched higher at the long (+1bp) end following profit-taking on the JUL-2045 (+10bps) bond. Conversely, the average yield was flat at the mid-segment.
Overall, the average yield remained stable to close at 10.69%.
Alpha Morgan Capital said FGN Eurobond kicked the week off on a bullish following buy-side pressures across the sovereign curve. Consequent to the sell adjustment to traders’ portfolios, the average yield was down by 10 basis points to close at 10.05%.
