Nigerian Bond Yield Falls to 16.88% on Bullish Momentum
The average yield on Nigerian government bond fell in the secondary market as bulls went on a rampage on the naira assets ahead of the Debt Management Office’s monthly auction for July.
Investors are betting on local bonds on expectations that supply will reduce in the third quarter, with lower spot rates signalinging from the latest primary market auctions. Demand remained concentrated at the mid-to-long end of the curve.
Inflation has maintained a consistent downward trend, and the naira is recalibrating against the dominant US dollar. Some analysts are anticipating monetary policy easing to commence amidst risk of capital outflow.
On Thursday, the bond market ended the session on a mildly positive note, as yields declined across key maturities, leading to a 26 basis point reduction in the average yield, which settled at 16.88%.
Trading activity focused on mid-term bonds, with limited deals done. However, Nigerian bonds maturing in May 2033 traded at 16.40%, continuing their downward trend.
Fixed income market analysts said the current cautious sentiment will continue for the week, adding that trading could be subdued with selective interest in key tenors. #Nigerian Bond Yield Falls to 16.88% on Bullish Momentum MTN Nigeria Hits N8.18trn, Analysts Positive on Earnings Outlook
