Fixed Income Investors Dump FGN Bond on Policy Inaction
Patience Oniha, DMO Boss

The average yield on the Federal Government of Nigeria (FGN) bond rose by 8 basis points (bps) as a result of selloffs in the secondary market. This plunged prices of bond assets downward while yield ascended on expected monetary policy inaction on rates.

Investors have recently started to adjust portfolio strategies to align with market development after inflation accelerated to 27.33% in October 2023. Market reaction was also spurred by an expectation of monetary policy rate adjustment in the month. However, the monetary policy committee has suspended the November meeting.

Trading activities turned bearish results of market negative reactions. The average yield increased by 8 basis points (bps) to close at 15.81%. This negative sentiment was majorly due to yield expansions of 72bps and 41bps observed in the APR-49 and JUL-45 FGN bonds.

In the money market, the Nigerian Interbank Offered Rate trended higher across most of the tracked by Cowry Asset Limited, the investment firm said in a note. Key money market rates, including the open repo rate (OPR) and the overnight lending rate (OVN), increased by 2.27% and 1.68% to 23.10% and 23.88%, respectively. 

On the other hand, the Nigerian Interbank Treasury Bills True Yield (NITTY) closed lower across all of the tracked tenors, according to traders. Consequently, the average secondary market yield on the Nigerian Treasury Bills was down by 52 bps across the short, mid and long end of the curve to close at 12.74% on the back of buy interest.  #Fixed Income Investors Dump FGN Bond on Policy Inaction

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