Nigeria Bonds Yield Falls as Demand for Naira Asset Rises
The average yield on Nigerian government bonds declined as demand for naira assets continue to increase in the secondary market. The bond market recorded mixed activities with investors trimming and adding to portfolios in an efforts to optimise returns.
Buying interests were observed at the short and mid segments of the curve, CardinalStone Limited said in a note, pointing particularly at increased demand for the APR 2029 (-75bps) and JUL 2030 (-19bps).
The market exhibited a mixed trend throughout the week, initially leaning bearish with offers present across the curve. Key maturities, including April 2029, February 2031, and January 2035, saw significant interest.
In the week, sell pressure intensified on the February 2031 and January 2035 bonds as local investors locked in profits ahead of the upcoming bond auction. Investment firms said trading remained constrained by widening bid-ask spreads, with subdued demand in the mid-tenor segment.
In the latter part of the week, limited activity persisted, leading to a 5-10bps increase in yields, though the average mid-yield across the curve declined on the back of sustained demand.
“We anticipate mixed market sentiment next week, with investors selectively targeting appealing yields primarily in the mid-range maturities of the curve”. Hence, the average benchmark yield fell week on week, reflecting the dominance of bullish bias. The yield on auction papers – Apr-29, Feb-31, and Jan-35 maturities decline of 73bps, 25bps, and 35bps to conclude at 20.86%, 21.62%, and 21.50%, respectively.
The long end of the curve saw movement, with the Jun-53 bond slipping by 18bps to 17.60%. However, as the week drew to a close, trading activity softened, with investors treading cautiously ahead of the year’s first MPC meeting.
Across the benchmark curve, the average yield decreased at the short (-39bps), mid (-22bps), and long (-2bps) segments following demand for the JAN-2026 (-110bps), JUL-2030 (-40bps) and JUN-2053 (-18bps) bonds, respectively. #Nigeria Bonds Yield Falls as Demand for Naira Asset Rises Interbank Rates Slow as Remita, FAAC Credits Boost Liquidity
