Sell Bias on FGN Bonds Drives Yields Upward
Fixed income securities traders at TrustBanc Capital Limited said it was another quiet trading session at the FGN Bond market secondary market yesterday with a moderate sell bias at the short spectrum.
According to traders, Jan-26 and Mar-27 FGN Bonds maturities recorded 5 basis points and 46 basis points jump in yields, respectively as asset/fund managers reposition their portfolios.
As a result, the average benchmark yield climbed by 4 basis points to 14.34% in the secondary market.
In its market note, Cowry Asset Management Limited confirmed to fixed-income securities investors that the average yield was on the secondary after a switch from a rallying mood.
The 10-year FGN bond, 15-year bonds, 20-year notes, and 30-year papers saw their respective yields remain steady at 13.30%, 14.75%, 15.23%, and 15.84%, respectively.
The real return on assets has plunged below the inflation rate, clouded further by weak local currency. Again, some analysts think inflation will maintain an uptrend as the statistics office is set to release new figures for April.
Headline inflation has failed to respond positively to the apex bank monetary policy tightening. Since May when the Central Bank switched to its ongoing hawkish pose with a benchmark interest rate of 18%, inflation has surged to 22.04%.
Bondholders are expecting catalysts that will force another yield repricing in the local debt capital market. The spot rate adjustment has been intermittent due to liquidity size experience in the past auctions
In the international debt market, trading was mixed in the Eurobond segment, as foreign portfolio Investors were positioned on both sides Offers were pronounced, especially at the near and far ends of the curve, while the bulls played mostly at the short end, according to TrustBanc Capital Limited.
At the close of the trading session, the average benchmark yield printed at 13.23%. The 10-year US Treasury yield jumped by 8 basis points to close at 3.52%. #Sell Bias on FGN Bonds Drives Yields Upward Naira Steadies as Banks Issue Update on FX Purchase
