Risk-off Sentiment Drives Nigerian Bonds Yield to 16.31%
The Nigerian bond benchmark yield surged by two basis points to 16.31% as negative sentiment exhibited by investors in the secondary market drove prices lower.
The market was mildly bearish on Tuesday, as selling pressure at the mid-to-long end largely outweighed muted activity across most other tenors.
At the short end, yields were mostly stable, with the 20-Mar-2027 FGN bond recording a marginal 1bp compression, while other nearby maturities closed flat, AIICO Capital said in a note.
Fixed income market analysts reported that trading activity was weaker at the belly of the curve, as yields on the 21-Feb-31 and 27- Apr-32 papers expanded by 3bps and 11bps, respectively.
Sentiment deteriorated further at the long end, where selling interest drove yield expansion on the 15-May-33 and 18-Jul-34 bonds by 18bps and 19bps, while the 21-Feb34 bond bucked the trend, recording a 14bp yield compression.
AIICO Capital reported that other long-dated bonds closed unchanged.
Overall, the pressure at the mid-to-long end was sufficient to push the average benchmark yield higher by 2bps to 16.31%. Fixed-income market analysts said yields at the belly of the curve closed within the range of 16.40% and 17.50%.
The market expects liquidity conditions, as well as demand and supply dynamics, to drive yield movements in the interim. #Risk-off Sentiment Drives Nigerian Bonds Yield to 16.31% CBN Allots N2.1 Trillion OMO Bills to Banks, FPIs at 17.25%
