Investors Up Bond Buying Ahead of DMO Auction, Inflation Data
The secondary market for the Nigerian government bonds saw very little trading activity, with isolated transactions occurring at longer maturities ahead of the debt office main auction and inflation data from the statistics office.
Despite huge bets on short term borrowing instruments at the primary market on Wednesday, investors still increased their interest in local bonds. This dragged the benchmark yield downward while market actors expect supply tightening by the Debt Management Office.
DMO is expected to conduct its monthly bond sales for Sept. Inflation data for August is expected to be released mid-September, according to the National Bureau of Statistics calendar.
At the last reading in July, inflation decelerated to 33.40% after more than 2 years due to based effects. As a result of their respective market expectations, consumer price index, and slowdown in bond issuance by the DMO, investors have been ramping up debt securities in the secondary space.
Traders said buying activity was observed at the long end (-4 bps), particularly in the JAN-42 (-24 bps) and JUL-45 (-12 bps) instruments. Consequently, average yields contracted by a basis point to close at 18.73%.
In its market update, Cordros Capital Limited said across the benchmark curve, the average yield declined at the short (-2bps) and long (-4bps) ends due to buying interests in the MAR-2025 (-12bps) and JAN-2042 (-24bps) bonds, respectively, but remained unchanged at the mid segment.
#Investors Up Bond Buying Ahead of DMO Auction, Inflation Data Jaiz Bank Trades at 44% Discount to 52-Week High
