Investors Dump Reopened, New FGN Bonds 24 Hours after Auction
Nigerian reopened, and new auctioned bonds across 5-Year, 7-Year, and 10-Year maturities faced sell pressures in the secondary market as investors’ sentiment declined. MarketForces Africa reported that Nigeria priced local bonds higher at the auction, where it offered N450 billion to investors and allotted a lot more due to oversubscription.
On Tuesday, the bond market displayed a bearish trend following the bond auction, where the marginal yields for the April 2029, February 2031, and newly issued January 2035 bonds were recorded at 21.79%, 22.50%, and 22.60%, respectively.
The auction papers Apr-29 and Feb-31 garnered mild profit-taking in the secondary market 24 hours after they were allotted, closing at an offer of 21.60% and 22.40%, respectively, with no significant bids to match, according to TrustBanc Financial Group Limited.
The risk-off sentiment displayed in the secondary market after the first monthly auction conducted by the debt office caused the benchmark yield to rise to 20.71%, fixed income market analysts said.
With real return widening to 7.3%, inflation (34.80%), and the interest rate benchmark (27.50) are expected to rise further in the short term but at a slow pace amidst a plan to rebase Nigeria’s consumer price index in 2025.
Notable selling pressure was evident on these auctioned bonds as several market participants sought to capitalize on their auction gains, AIICO Capital Limited said in a note. The investment firm, however, noted that only a limited number of matching bids were observed.
Across the benchmark curve, the average yield declined at the short (-1bp) end due to buying interest on the JAN-26 (-7bps) bond. However, yield expanded at the mid (+7bps) segment following sell pressures on the JUL-2030 (+14bps) bond. The average yield remained unchanged at the long end, Cordros Capital Limited told investors in a note. FBN Holdings Records Huge Off-Market Shares Transactions
