Sell Pressures Nudge Yield on Nigerian Bond to 18.74%
Sustained riskoff sentiment on the Federal Government of Nigeria (FGN) bond persisted in the secondary market over subdued returns. The Debt Management Office has kept rates on FGN bonds under its control over sustained efforts to keep Nigerian debt service costs under check.
Some market critics see this as financial repression considering that inflation (33.15%) remained far ahead of the benchmark interest rate (27.25%) versus returns on portfolios.
The pace of yield repricing has been slowed in the fixed income market while by consensus, the market expects disinflation to persist in the remaining part of the year in the absence of shock.
In the secondary market for the FGN Bond market, there was negative trading activity, resulting in a 0.01% increase in the average yield to 18.74%. Bondholder investor selloff activities were observed at the mid-segment of the curve, particularly in the MAY-33.
Fixed income analysts said yields increased on selected papers, specifically the 2031 and May 2033 FGN bonds. Fixed income market analysts at AIICO Capital Limited said most participants remained pessimistic due to the recent interest rate hike.
However, towards the close of the market, a few buyers resurfaced. As a result, the average mid-yield rose by 6 bps. “We expect a similar play at tomorrow’s session, though coupon inflows should drive some buying interest,” analysts said.
Collaborating the sell side activities, Cordros Capital Limited said in a note that the average yield expanded slightly at the short (+1 bp) end following the selloff of the JAN-2026 (+1 bp) bond but closed flat at the mid and long segments. #Sell Pressures Nudge Yield on Nigerian Bond to 18.74% Naira Rises against US Dollar Ahead of Sept. FX Auction
