Yield Rises 8bps as Sell Pressures Hit FGN Eurobond
The average yield climbs 8 basis points to 6.46 per cent on Thursday as selling pressures hit the Federal Government of Nigeria (FGN) Eurobond in the secondary market, traders said in a note.
While dollar-denominated FGN bond witnessed selloffs across the sovereign curve, trading activities in the fixed income market remains largely on a calm note as Treasury, bondholders await fresh catalysts.
Inflation pressures seen in the latter part of 2021 impacted investors’ real return, but some fixed income analysts told MarketForces Africa yield repricing is possible as Debt Management Office announced a plan to raise N480 billion in the first quarter of 2022.
At the money market today, due to robust liquidity, the average interbank rate dropped by 25 basis points to close at 0.88%, following declines at both the Open Buy Back rate and overnight rate.
The overnight rate decreased by 0.25 percent to close at 1.00 percent as against the last close of 1.25 percent, and the Open Repo rate also decreased by 0.25 percent to close at 0.75 percent compared to 1.00 percent on the previous day.
Meanwhile, trading activities in the Nigeria T-Bills secondary market closed on a flat note with average yield across the curve remaining unchanged at 4.48 percent, Alpha Morgan Capital, FSDH Capital said in a note.
Average yields across short-term, medium-term, and long-term maturities remained unchanged at 3.68 percent, 4.05 percent, and 5.40 percent, respectively.
In the OMO bills market, the average yield across the curve closed flat at 5.68 percent, according to fixed income traders’ notes. It was noted that average yields across short-term and long-term maturities remained unchanged at 5.42 percent and 5.81 percent, respectively.
Due to calm trading activities in the fixed income market, FGN bonds secondary market also ended flattish as the average bond yield across the curve closed flat at 11.52 percent. Read: Renewed Investor Appetite Drags Short-Term Government Securities
Traders at FSDH Capital said the average yield across the long tenor of the curve expanded by 1 basis point, while the average yields across short tenor and medium tenor of the curve declined by 1 basis point each.
The 22-JAN-2026 maturity bond was the best performer with a decrease in the yield of 3 basis points, while the 27-MAR-2035 and 18-MAR-2036 maturity bonds were the worst performers with an increase in the yield of 3 bps each.
Today, activities at the FGN Eurobond market traded on a bearish note, following selling pressures across the sovereign curve. While Eurobond price inched lowers, the average yield climbed by 8 basis points to close at 6.46%. #Yield Rises 8bps as Sell Pressures Hit FGN Eurobond
