Nigerian Bonds Yield Climbs as Investors Dump Debt Papers
Benchmark yields on Nigerian government bonds surged by 25 basis points (bps) as investors dumped local debt papers in the secondary market on Monday.
Asset managers and portfolio holders rotated out of their positions as the market anticipated inflation and interest-rate dynamics that would fuel repricing at the monthly auction.
Market analysts said the government will begin to accelerate local borrowing to meet the first-half budget deficit, noting that bond supply has been less than impressive.
The average yield on sovereign debt climbed to 16.59%, indicating significantly dampened domestic investor confidence and a notable weakening of appetite for naira assets in the secondary market.
Fixed income securities analysts reported yield expansions at the short end (+22 bps), mid segment (+13 bps), and long end (+49 bps) of the curve.
Traders reported notable papers with sell-offs include JUN-38 (+116 bps), JAN-42 (+87 bps), and APR-29 (+61 bps). Average yield increased by 25bps to settle at 16.59%.
Last week, the fixed income market closed on a mixed note, with robust demand in the primary market contrasting with weaker sentiment in parts of the secondary market.
Investor appetite remained strong across OMO bills and Treasury bills, while the FGN bond market witnessed mild repricing and Eurobond yields edged higher. CBN Raised N4.5trn from OMO, Treasury Bills Auctions
