Nigerian Bonds Yield Increased to 20.74% on Selloffs
The average yield on Nigerian government bonds surged further to 20.74% in the secondary market due to sell pressure that has persisted for days. Investors in the local debt market have been offloading the local borrowing instruments ahead of new supply, with expectations that a higher inflation rate would act as catalysts for yield repricing.
The market witnessed profit taking at the long end of the curve on Wednesday as the plan to rebase the country’s GDP and consumer price index raises a positive outlook on macroeconomic data. On Wednesday, investors sold down interest in the JAN 42 (+136bps), JUL 45 (+132bps), and JUL 49 (+127bps) instruments, among others.
The sell-down led to an 84-bps expansion at the long end of the curve. Also, the short-end (+13bps) also witnessed bearish sentiments due to selloffs at the APR 29 (+74bps) paper.
Consequently, average yields expanded by 32 bps to settle at 20.74%. Analysts at TrustBanc Financial Group Limited spotted the selling wave that swept across the curve following the renewed liquidity shortfall.
Market participants strategically offloaded their holdings, particularly at the mid and long ends of the curve, according to a note released by the investment firm. The Jan-42s, bearing the brunt of the selling pressure, increased by 136 bps. Meanwhile, decent buying interest emerged on the Feb-31 paper as investors sought to capitalise on its attractive yield.
Across the benchmark curve, the average yield increased at the short (+5 bps) and long (+84 bps) ends, Cordros Capital Limited told investors in a note. #Nigerian Bonds Yield Increased to 20.74% on Selloffs NCC Hosts Stakeholders’ Forum on A2P Licensing Framework
