The average yield on Federal Government of Nigeria (FGN) bonds fell slightly to 19.72% in the secondary market on Wednesday due to purchasing demand.
Traders reported that market activity levels were uneven, with purchasing activity evident on the short end of the curve (-2 bps) and sell-offs largely on the mid (+3 bps) and long (+1 bp) of the curve.
Cordros Capital Limited’s fixed-interest securities asset managers reported that the average yield closed flat at the short end but fell in the middle (-6 bps).
The yield contractions at both segments were due to buying interests in the FEB-2031 (-15 bps) bond. Conversely, the average yield expanded slightly at the long (+1 bp) end, driven by sell pressures on the June 2053 (+7 bp) bond.
On Monday, the Debt Management Office (DMO) conducted a bond auction. The indicated amount on offer is N190 billion. All instruments on offer are re-opening issues.
Meanwhile, in the secondary market, the sentiment has been bearish since the last auction, as the average bond yield rose to 19.70% as of August 16, 2024, from 19.29% at the last auction date.
The DMO concluded the last bond auction in July 2024, offering higher rates to investors. Marginal rates on the trio instruments 2029, 2031, and 2034 increased by 25 bps, 81 bps, and 48 bps to 19.89%, 21.00%, and 21.98%, respectively.
