Benchmark Yield on Nigerian Bonds Rises 10bps
The benchmark yield on Nigerian government bonds increased by 10 basis points week on week in the secondary market, reflecting investors’ risk-off sentiment in the debt instruments.
A slew of analysts maintained that the yield on debt papers will continue to trail other short-term investment instruments as the Debt Office continues to reduce its borrowing costs.
Despite their similarities, bond yields are below those of short-term investment securities, including Nigerian Treasury and OMO bills, in the fixed-income market.
Asset managers and institutional investors with an interest in long-term investment bets continue to be locked in yields in long-duration naira assets.
Broadstreet analysts reported that Nigeria’s bond market closed in the negative zone, with average yields increasing by 10bps to 15.89% week on week, from 15.79%.
The yield contraction was driven by strong sell pressure in the short end of the curve, particularly in the Mar-27s (+157bps and +155bps), Feb-31 (+13bps ), and Apr-32 (+17bps).
However, buying interest still surfaced in select tickers across the curve, concentrated in the mid-to-long end, with the May-33 (-22bps), Jun-33 (-20bps), and Jan-42 (-9bps) papers recording yield declines. Nigerian Treasury Bills Yield Rises to 17.3% after Auction