Nigeria Bonds Selloffs Push Yield to 13.35%
The bond market launched a fresh selling rally in the new week amidst the expectation that Nigeria’s debt agency would switch from depress rates on borrowings as inflation and interest rates surged.
According to CardinalStone asset managers’ market update, sentiment in the FGN bonds secondary market was bearish as the average yield inched up by 4 basis points to settle at 13.35%.
Across the benchmark curve, Cordros Capital said in its market note that the average yield closed flat at the short and mid segments but expanded at the long (+9bps) end due to profit-taking activities on the APR-2037 (+40bps) bond.
The multi-asset investment firm said activity was predominantly at the long end of the curve (+9bps), with selloffs across the APR-2037 (+40bps), JUN-2038 (+30bps), and JUN-2053 (+13bps) papers.
There were selloffs across long-dated securities, particularly in the 18 APR 2037 debt, which resulted in a marginal expansion in the average secondary market yield rose 3 basis points to 12.91%; Cowry Asset Management Limited told investors in its market update.
Fixed income market traders noted that the 20-year FGN borrowing cost also increased 40 basis points, yielding approximately 15.00%; likewise, the 30-year FGN debt yield ROSE 7 basis points to 15.12%.
Conversely, market analysts reported that the 10-year FGN bonds remained stable at 13.22%, respectively. Elsewhere, FGN Eurobonds faced appreciation across all tracked maturities, reflecting bullish sentiment, which translated into an average secondary market yield decrease 5 basis points to 10.30%.
Yesterday, liquidity pressure began to resurface, though analysts said local banks’ participation at the CBN standing lending facility remains minimal. Key money market rates: The open repo rate (OPR) and the overnight lending rate (OVN) experienced upward movements to 5.90% (from 5.83%) and 7.2% (from 6.83%), respectively.
Meanwhile, the Nigerian Interbank Treasury Bills True Yield (NITTY) observed a downward trend across most maturities, driven by demand pressure, which pushed yields lower. The average secondary market yield on T-bills remained at 6.96%. #Nigeria Bonds Selloffs Push Yield to 13.35% Naira Devaluation Deepens Economic Crisis in Nigeria