Investment notes state that the average yield on Federal Government of Nigeria (FGN) bonds increased in the secondary market. The Debt Management Office’s (DMO) primary market auction saw a spike in spot rates at the start of the week, which prompted sell pressure.
After prolonged financial restrictions, the debt office reversed course and provided investors higher spot rates on bond offerings, contrary to market expectations.
According to Cordros Capital Limited’s market update, the average yield rose at the short (+1bp) end of the benchmark curve. Investors’ decision to sell off the MAR-2025 FGN Bonds, whose yield increased by +2bps, was blamed for the yield jump.
On the other hand, yield contracted by 32bps at the mid segment due to buying interest in the JUN-2033 FGN Bonds with 156bps yield decline. Meanwhile, the average yield was unchanged at the long end.
While yields increased in response to yesterday’s auction, some investors cherry-picked a few maturities, particularly the on-the-run bonds, AIICO Capital Limited told investors.
Nevertheless, the market settled bearishly, and the average mid-yield increased by 21 basis points to 18.82%, separate traders said in their investment notes to clients.
