On Tuesday, demand from investors and portfolio managers increased, which resulted in a decrease in the average yield on the Federal Government of Nigeria’s (FGN) bonds on the secondary market.
According to market observers, this week’s rates will increase due to anticipated financial sector liquidity pressure. The local debt capital market has been buoyant in 2023, driving the yield curve lower despite rising inflation data due to increasing demand for government assets.
Trading in the FGN bond, according to traders, was optimistic as local investors sought to lock in capital in gilt-edge products in the face of growing economic growth uncertainty in the first quarter of 2023.
The average yield decreased by 3 basis points to 13.0% as a result. Investors were notified via email by Cordros Capital analysts that the average yield decreased at the short (-6bps) and long (-2bps) ends of the benchmark curve.
Investor demand for the MAR-2050 (-6bps) and APR-2023 (-17bps) bonds, respectively, was what caused the drop. At the mid-segment, the average yield closed unchanged.
According to a Cowry Asset Management report, the 10-year FGN Bond and the 30-year debt papers were 10 basis points and 6 basis points wealthier, and their corresponding rates decreased to 13.10% (from 13.20%) and 15.20% (from 15.26%), respectively.
According to analysts’ notes, 15- year and 20-year FGN bond yields remained stable at 14.80% and 15.88%, respectively amidst cold trading outings in the related tenored ahead of Saturday election.
Elsewhere, the value of the FGN Eurobond decreased for most of the maturities amid sustained bullish sentiment, according to Cowry Asset analysts. Then, the average secondary market yield increased to 12.38%.
