Yields on Nigerian government bonds edged lower on Thursday as the secondary-market average declined by three basis points to 15.79 percent, signalling a surge in investor appetite for domestic sovereign securities ahead of the November issuance.
The decline reflects a growing cohort of risk-averse investors seeking attractive returns in the local fixed-income market, driven by expectations of a forthcoming interest-rate cut from the Central Bank of Nigeria (CBN) later this month. Consensus among analysts at the local firm Broadstreet points to inflation dipping below 18 percent, helping support the dovish monetary-policy stance.
Short- and medium-tenor issues saw noticeable yield compression: papers maturing in 2027, 2028 and 2029 slipped to 15.83 percent, 15.90 percent and 15.88 percent respectively. In contrast, moderate selling in the mid-tenor space pushed yields on the 27-Apr-2032 and 2033 maturities up by four and five basis points, to 15.83 percent and 15.78 percent respectively. Long-maturity trading remained relatively calm overall.
Market sentiment remains bullish for the remainder of the week as investors lock in yields and build positions. A recent cut in the one-year Treasury bill stop-rate by the CBN to 16.04 percent helped underpin demand.
Amid an improved liquidity backdrop, expectations are rising for a continued rally in fixed-interest securities toward the week’s close as participants lock in current yields ahead of policy action.
