Nigerian Bonds Yield Falls on Post-Disinflation Reactions
The benchmark yield on Federal Government of Nigeria (FGN) bonds eased to 16.6% in the secondary market as a result of fixed interest income investors sustained buying appetite.
Local bond yields have been in decline as markets experience tight supply and disinflation ahead of policy rate cut expectations. Inflation fell to 22.22%, tracking benchmark interest rate of 27.5%
Investors are buying Nigerian bonds to lock in yield before the Central Bank cuts the benchmark interest rate, which is expected to affect the spot rate at the primary market auction across the debt market.
On Thursday, the Federal Government of Nigeria bond market closed on a mildly positive note, driven by yield declines across key maturities. Traders said the downward movement resulted in an 8 basis point reduction in the average yield, which settled at 16.62%, reflecting modest investor demand.
The moderation in yields was supported by demand across the curve, led by the short end, which dipped by 11 bps, followed by the mid segment (-9 bps) and the long end (-2 bps).
Investment analysts said while some movement occurred on short-to-mid-dated bonds, most axes stayed wide. A few bond with Feb 3031 maturity traded at 16.55% yield, though average yields ultimately held steady. #Nigerian Bonds Yield Falls on Post-Disinflation Reactions MTN Nigeria Hits N400 Per Share in Equities Market
