Nigerian Bond Yield Declines to 19.42% as Demand Surges
The average yield on Nigerian government bond declined in the secondary market due to buying momentum seen across the short, belly and longer maturities on Tuesday.
With disinflation, and slowdown in government borrowing instruments supply in the local debt market, investors have been left with little choice in the financial markets but to increase their holdings in the secondary market.
Market anticipates that inflation would continue to decline in the third and fourth quarter of the year due to base effects and reduce pressure on food inflation.
More so, Nigeria economy has continue to grow, outperforming previous quarters performance as oil production improve. On the policy side, key ratings agencies continue to upgrade the sovereign ratings as a results of Nigeria’s fast and furious economic reforms.
The look has been accorded as positive, and creditworthiness of the Africa’s largest economy has been upgraded despite negative effects on key macroeconomic indicator –which most analysts see a short-term.
Fixed interest securities traders said trading activities were skewed mostly to the short and long ends of the curve. Specifically, investors acquired the MAR-25 (-194bps), MAR-50 (-85bps), and JUN-53 (-92bps) papers.
There was a persistent interest on May 2033 and 2053 papers. Overall, the average mid-yield declined amidst disinflation and strong economic performance in the second quarter of 2024.
With increase in demand for FGN bond in the secondary market on Tuesday, the average yield decreasing by 12bps to close at 19.43%.
Cordros Capital Limited stated that the average yield dipped at the short (-38bps) and long (-21bps) ends following profit-taking activities on the MAR-2025 (-194bps) and JUN-2053 (-92bps) bonds, respectively but closed flat at the mid segment. #Nigerian Bond Yield Declines to 19.42% as Demand Surges
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