Nigeria Bond Benchmark Yield Falls To 19.27%

FGN Bond For Jan. 2021 Oversubscribed

Thin transactions in Nigeria’s fixed income market resulted in a little shift in the bond yield curve. The Federal Government of Nigeria’s secondary market saw comparatively calm and chilly activity with a little bullish slant.

Following Monday’s debt management office (DMO) primary market auction sales, there were a few transactions, according to investment companies’ fixed income market reports.

The authority provided pension fund administrators and authorized dealers with a 20% spot rate on 10-year bonds. The increased demand for government borrowing instruments resulted in a more than two-fold oversubscription for the auction.

The borrowing rate was adjusted upward for interest rates. In order to keep spot rates lower until the market sought yield repricing following policy rate adjustments amid uncontrollably high inflation conditions, DMO had frontloaded bond sales.

Fixed interest securities investors investor increased their portfolios with moderate interest in short end (-9bps) of the curve. Hence, average yields declined by 3bps to close at 19.27%.

In the money market, liquidity pressures increased despite inflows from matured OMO bills. The overnight lending rate expanded by 98bps to 31.4% despite N17 billion inflows from OMO bill.

Fixed income securities asset traders said across the benchmark curve, the average yield inched higher at the short (+1bp) end as investors sold off the MAR-2025 (+2bps) bond but closed flat at the mid and long segments.

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