Nigeria’s Bond Yields Steady amidst Election Rancour
The average yield on the federal government of Nigeria bonds was steadied on Tuesday over quiet trading activities amidst 2023 presidential election rancour, according to fixed income analysts/traders’ notes.
Investors held off trading activities in the secondary market for fixed interest instruments despite robust liquidity in the financial system. The local debt capital market has been riding a bullish wave even while the real return on naira assets plunged below Nigeria’s inflation rate.
The exposure to inflation pressures failed to alter the market mood due to the Pension Act 2014 demand that pension fund administrators should invest large chuck of assets under management in FGN Instrument.
In the secondary market today, the prices of FGN bonds were relatively flat for the majority of the maturities, investment banking firm, Cowry Asset Management Limited, noted in a brief sent to clients
Analysts said the average secondary market yield remained flat at 13.27%. The 15-year FGN Bond and 20-year FGN debt yields were richer by 9 basis points apiece.
Meanwhile, these FGN bond instruments corresponding yields contracted to 14.71% (from 14.80%) and 14.80% (from 15.81%), respectively, according to traders’ notes.
The 10- year and 30-year Nigeria bond yields remained steady at 13.04% and 15.20%, respectively. Elsewhere, the value of the FGN Eurobond decreased for all of the maturities amid sustained bearish sentiment.
Across the benchmark curve, investment banking firm, Cordros Capital Limited, told clients via email that the average yield expanded at the short (+3bps) end due to profit-taking activities on the JAN-2026 (+20bps) bond.
On the other side, yield contracted at the long (-3bps) end as investors demanded the APR-2037 (-9bps) bond. The average yield was unchanged at the mid-segment. Market analysts said the average secondary market yield expanded to 11.82% as foreign investors weigh risks on Eurobond assets. #Nigeria’s Bond Yields Steady amidst Election Rancour
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