Sell Pressure on Nigerian Bonds Drives Yield Highers
The average yield on Federal Government of Nigeria (FGN) bonds climbed in the secondary market, according to investment notes reviewed by MarketForces Africa.
The sell pressure followed a surge in spot rates at the primary market auction conducted by the Debt Management Office (DMO) at the beginning of the week.
With a change in direction, the debt office offered investors higher spot rates on bonds issues in contrast to market expectation after sustained financial repression.
In its market update, Cordros Capital Limited explained that across the benchmark curve, the average yield increased at the short (+1bp) end. The yield surge was attributed to investors’ decision to sell off the MAR-2025 FGN Bonds whose yield rose by +2bps.
On the other hand, yield contracted by 32bps at the mid segment due to buying interest in the JUN-2033 FGN Bonds with 156bps yield decline. Meanwhile, the average yield was unchanged at the long end.
While yields increased in response to yesterday’s auction, some investors cherry-picked a few maturities, particularly the on-the-run bonds, AIICO Capital Limited told investors.
Nevertheless, market settled bearish, and the average mid-yield increased by 21bps to 18.82%, separate traders said in their investment note to clients. #Sell Pressure on Nigerian Bonds Drives Yield Higher We’ll pay Salary Arrears in Tranches—Abia Govt.
