Nigeria Bonds Rally, Debt Market Investors Sense Tight Supply
In the secondary market, the Nigerian government bonds market rallied as investors continued to increase their bets on the naira assets in hopes of strong economic growth and fiscal strength.
Demand climbed in the secondary market as fixed-interest securities investors sensed a limited bond supply at the Debt Management Office’s monthly auction. The monthly auction subscription was less impressive than market analysts had thought, and DMO struggled to meet demand with lower spot rates.
With disinflation, real return on investment has remained attractive given the monetary authority’s decision to keep the benchmark interest rate at double-digit highs. The elevated yields have boosted investors’ interest in the bond market. Pension fund administrators remain active in the bond market as the major actors, channeling pension funds into government fixed interest securities assets.
A slew of fixed income market analysts said the FGN bond market experienced positive activity on Thursday, with yields remaining mostly stable across different maturities. However, the average yield on sovereign bonds declined by 8 basis points to 18.88%.
Bullish sentiment was observed at the short (-12bps) and mid (-9bps) segments of the curve, particularly in the 29s and 31s, driving an 8bps decline in average yield to 18.88%. Across the benchmark curve, the average yield contracted at the short (-15 bps) and mid (-8 bps) segments, driven by the demand for the JUL-2030 (-40 bps) and FEB-2031 (-42 bps) bonds, respectively.
The average yield remained unchanged at the long end. #Nigeria Bonds Rally, Debt Market Investors Sense Tight Supply Nigerian Exchange Lost N70bn over Selloffs in Tier-1 Banks
