Nigerian Bonds Yield Steady after DMO Auction Pricing
The benchmark yield on Federal Government of Nigeria (FGN) bonds steadied in the secondary market after the Debt Management Official (DMO) monthly primary market auction at the beginning of the week.
In the secondary market, Nigerian bonds continued to trade on a calm note, with significant interest seen at the belly of the curve, notably the 2031s and 2033 papers.
The 2031 paper was offered at 19.60%, about 20 bps lower on the day, while yields remain stable at the long end, CardinalStone Securities Limited said in a commentary note.
At the close of the trading session, the average yield was flat at 19.03%, with bond traders maintaining steady demand for mid-curve tenors after yesterday’s auction, particularly for the Apr 2029, Feb 2031, and May 2033 maturities, which traded near mid-market levels.
At April’s bond auction, the DMO allotted N397.89 billion against its N350 billion offer, selling the 19.30% Apr 2029 at 19.00% and the 19.89% May 2033 at 19.99%.
The authority effectively raised N21.12 billion from 5-year bonds and N376.77 billion from 9-year bonds papers. Across the benchmark curve, the average yield expanded at the short (+3 bps) end as investors sold off the APR-2029 (+10 bps) bond but was unchanged at the mid and long segments.
Last week, the average yields increased by 1 bps across the benchmark curve to close at 19.01%. The short end of the curve witnessed a rise in yields, 6 bps to close at 19.61%; the medium and long ends of the curve decreased by 9 bps to close at 19.28% and 16 bps to close at 17.45%, respectively. NGX Rises by N228bn Gain as INTBREW, LENGENDINT Rally
