Nigerian Bonds Yield Falls Below 19% after Auction
The average benchmark yield on the Federal Government of Nigeria (FGN) declined by 22 basis points (bps) to settle at 18.90% in the secondary market due to the post-auction rally experienced on Tuesday.
Trading activities heightened in the bond market, driven by post-auction demand from investors who missed out and turned to the secondary market to fill their lost orders, AIICO Capital Limited said.
The Debt Management Office, DMO, offered investors N350 billion, divided between the April 2029 (₦200 billion) and February 2031 (₦150 billion) papers. The authority cancelled 10-Year bond re-issued at the main auction on Monday.
Details from DMO auction results revealed that total subscription came at ₦1.63 trillion across Apr-29 and Feb-31 on offer. However, total allotments reached ₦910.39 billion, with the 19.30% FGN APR 2029 and 18.50% FGN FEB 2031 papers allotted at marginal rates of 19.20% and 19.33%, respectively.
Traders reported that post-auction interest was particularly strong on the mid-tenor papers, including the April 2029s, February 2031s, February 2034s, and January 2035s. Hence, the average benchmark yield declined by 22 bps to settle at 18.90%, with the mid-dated papers enjoying most of the traction.
Demand was skewed towards the longer maturity, with 72% of subscriptions focusing on the 2031s bond compared to 28% for the 2029s. General bid-to-cover came in at 4.66x, higher than 1.49x recorded at the last auction. Stop rates printed lower at 19.20% and 19.33% on the Apr 29 and Feb-31 maturities, respectively.
# Nigerian Bonds Yield Falls Below 19% after Auction FG Calls on Traders to Lower Food Prices
