Yield Declines as Investors Bullish on Nigerian Bonds
The average yield on Federal Government of Nigeria (FGN) bonds dipped to 20.6% as investors’ sentiment improved in the secondary market. The market recorded moderate buying activity, with the APR 29 (-68 bps) and MAR 35 (-37 bps) witnessing the most interest.
Consequently, average yields contracted by 5 basis points to settle at 20.62%, CardinalStone Limited said, ahead of February monetary policy committee meeting. A slew of analysts are expecting the committee to adjust the benchmark interest rate higher to fight Nigeria’s hot red inflation.
Investors have been battling with negative interest yields on Nigerian government assets, though yields remained elevated and perhaps unsustainable, according to analyst reports. The rally in the bond market was fuelled by interest in the New Apr 2029, Feb 2031, and Jan 2035 securities, leading to a decline in rates.
Across the benchmark curve, the average yield declined at the short (-1bp) and mid (-6bps) segments, Cordros Capital Limited said in a note. The yield contracted as investors buying activities heated the bond market with attraction on the FEB-2028 (-17bps) and FEB-2031 (-17bps) bonds. However, yield remained unchanged at the long end.
Fixed income market analysts expect strong bullish sentiment today as investors actively pursue high-yielding securities, driven by the results of the Treasury bills auction. #Yield Declines as Investors Bullish on Nigerian Bonds Ministry Seeks $2 billion Fibre Optics Funding
