Investors Take Profit in Nigerian Bonds, Rates Cut Stokes Sell-Off
The average yield on Nigerian government bonds rose in reaction to sell pressures seen across the belly and long-tenor papers at the secondary market.
Investors’ interest in the local borrowing papers was subdued as the market anticipates returns to continue to thin out after the Debt Office cuts spot rate on reopening bonds at the primary market auction.
MarketForces Africa reported that the authority reduced spot rate on 5-Year reopened local papers to 15.832% from 16% for Sept auction. Also, Debt Office reduced spot rate on 7-year bonds to 15.85%, down from 16.20%.
The downward repricing rates affected investors’ sentiment, though the market anticipated that disinflation and the benchmark interest rate cut would impact pricing at the auction.
In the secondary market, investors maintained bearish sentiment, which was reflected in transactions at the secondary market on Wednesday. The market recorded a push in benchmark yield, up by 3 basis points on the day to 15.92% from 15.88% recorded on Tuesday.
Traders spotted notable sell-offs across the Nigerian bonds that will expire in APR 2029 (+39 bps), MAY 2029 (+38 bps), NOV 2029 (+27 bps), and AUG 2030 (+10 bps) maturities.
Notably, yields on the 20-Mar-2027 and 17-Apr-2029 papers declined to 16.01% (-1 bp) and 16.04% (-8 bps), respectively, while the 28-Apr-29 and 22-May-29 papers recorded yield increases of 39 bps and 38 bps, respectively.
In their separate reactions sampled by MarketForces Africa, fixed-income market analysts expect risk-off sentiment from investors in the near term. Nigerian Treasury Bills Yield Steady at 17.39%, Trade Softens
