Nigerian Bond Yield Climbs to 15.76% Ahead of Inflation
The benchmark yield on Nigerian government bonds edged higher to 15.76% in the secondary market as investors trimmed their portfolio holdings.
Market activity reflects a pre-inflation rate clean-up and adjustments by some portfolio holders in the debt capital market. Inflation is expected to decline in February, with the market consensus at an average 14% consumer price index print.
Riskoff sentiment on the naira curve nudged yields at the belly higher, while some positioning at the short and long end of the curve dragged yields.
Fixed income market analysts said sell-offs were concentrated at the short and long ends of the curve, with strong yield increases in the APR-29 (+30bps), MAY-29 (+22bps), and JUN-53 (+30bps) bonds.
During the week, buying interest was observed in maturities in the middle curve, as yield declines were recorded in JUN-32 (17bps), MAY-33 (-39bps), and FEB-34 (-26bps).
Sustained disinflation would widen real returns on naira assets across the financial market, while the global energy crisis casts doubt on the monetary authority’s outlook for rate cuts. OMO Bill Yield Increases as Investors Trim Holdings
