Nigeria’s 10-Year Bond Yield Slides to 12.94%
The average yield on Nigeria’s 10-year bond declined to 12.94% midweek due to increasing demand for the paper by local investors in the fixed income market. With the inflation rate level at 22.04%, the real return on naira-denominated investment securities assets remains exposed.
The bond market is enjoying government regulations that demand that a large chunk of pension assets must be invested in the space.
Moving to balance their respective portfolios, fund/asset managers traded mixed at the FGN Bond market as market players submitted sizeable bids on short-dated maturities to submerge paltry offers at the belly of the curve.
Notably, Mar-27 FGN bond which lost 36 basis points recorded the sharpest drop in yield, while Mar-35 paper added +21 basis points to close at 14.96%, traders reported. Accordingly, the average yield cleared a basis point lower to 14.33%.
Elsewhere, the Eurobond market received sizeable bids from Foreign Portfolio Investors, despite indications of cooling from the just-released US Consumer Price Index data which came at 4.9%.
According to TrustBanc Capital, the bullish bias skewed mostly to the near corner of the benchmark curve, as Jul-23 securities dipped by 63 basis points. Accordingly, average yield slid by 9bps to close at 13.14%. The 10-year US Treasury yield inched 1bp higher to close at 3.53%.
FGN bond prices were largely flat for most maturities, despite the average yield on the secondary market contracting, according to Cowry Asset Management Limited.
The investment firm to clients in a mail that the 10-year debt was 104 basis points richer, yielding 12.94% (from 13.30%), while the yield on the 15-year note ticked up 21 basis points to 14.96%.
The 20-year and 30-year FGN Bonds yields held steady at 15.23% and 15.84%, respectively. Amidst fx crisis in Nigeria, the Naira weakened against the greenback, trading lower at N463.02 (from N462.25) at the Investors’ and Exporters’ windows.
Naira Steadies as Banks Issue Update on FX Purchase
