Traders Raise Bets on Nigerian Bonds Ahead of Inflation, Auction
Investors in the fixed income market raised bets on Nigerian government bonds ahead of inflation figure, Debt Management Office auction for February. On Monday, the local bonds market showed a mixed trend, leaning towards bullish sentiment. There were offers across the curve, matched by similar buying interests.
Trading activities were largely driven by sustained investor confidence in the high-yield environment and expectations of a potential shift in monetary policy. Traders said there were significant interest in the April 2029, February 2031, and January 2035 bonds, causing a drag in mid-yield.
Ahead of inflation figure, auction and monetary policy committee meeting, market participants bought in mild volume at the near and mid ends of the yield curve. The Apr-29 bond led activity at the short end, dropping 20bps to 20.20%, while the Apr-37 declined by 35bps to close at 18.40%, TrustBanc Financial Group Limited told investors.
However, as optimism built, some investors capitalized on earlier gains, taking profits on the Feb-31 and Jan-35 maturities after their strong performance the previous week. Major activity was seen at the mid-segment of the curve, where investors accumulated the FEB-31 (-54bps) paper in trades worth about.N28.9 billion.
On the day, the average benchmark yield contracted by 3bps to close at 19.94%, a sentiment that analysts expect to play on Tuesday. Last week, the FGN Bonds secondary market, bullish sentiment persisted as notable yield contractions were recorded at the short and mid-end of the curve.
Consequently, buying interest in JAN-26, FEB-28, MAR-35, and APR-49 led to a 30 basis points downward movement in the average yields to 20.53%. Demand for short and mid-term instruments intensified as investors sought to lock in attractive rates amidst broader economic uncertainties. #Traders Raise Bets on Nigerian Bonds Ahead of Inflation, Auction CBN Opens FX Window for BDC to Stock up at NFEM Rate
