Yield on FGN Bond Falls 15bps, T-Bill Ends Flat
The average yield on the Federal Government of Nigeria (FGN) bond falls 15 basis points on Monday in the secondary following hefty buying interest. However, the average yield on Nigerian Treasury bills ends flat at 3.45%.
In the money market, short term rates adjusted downward as expected in the first trading week due to relatively healthy liquidity and lower funding pressures.
The average interbank rate dropped by 442 to close at 2.38%, according to a market report. Data from FMDQ shows that the overnight lending rate declined by 433 basis points to close at 9.50 percent as against the last close of 13.83 percent.
Also, the open repo rate decreased by 450 basis points or 4.50 percent to close at 8.83 percent compared to 13.33 percent on the previous day. Following a slowdown in the spot rates, trading activities at the Nigerian Treasury bills secondary market ended on a calm note.
However, traders at Alpha Morgan Capital said they spotted traction at the longer end of the curve – the Jan 2023 paper. Consequently, the average rate retained its prior position to close at 3.45%.
In the open market operations (OMO bill0s) market, the average yield across the curve closed flat at 3.92 percent. The average yield across the long-term maturities remained unchanged at 3.92 percent.
In the bond market, trading activities on FGN bonds closed on a positive note as the average bond yield across the curve cleared lower by 15 bps to close at 10.41 percent from 10.56 percent on the previous day.
Average yields across short tenor, medium tenor, and long tenor of the curve declined by 2 bps, 10 bps, and 24 bps, respectively, according to FSDH Capital.
The 18-MAR-2036 maturity bond was the best performer with a decrease in the yield of 67 basis points, according to traders while the 22-JAN-2026 maturity bond was the worst performer with an increase in the yield of 6 basis points.
Alpha Morgan Capital said in a note there were high demands on 2023, 2026, 2028, 2029, 2034, 2035, 2036 and 2042 maturities.
Today, the FGN Eurobond market was bearish again as investors’ risk-off sentiment was retained from the previous week. In sum, traders said the average yield was up by 51 basis points to close at 8.50%. #Yield on FGN Bond Falls 15bps, T-Bill Ends Flat
READ: Analysts Expect Rates to Remain Subdue Until Friday FX Auction
