The average yield of Federal Government of Nigeria (FGN) bonds closed flat at 16.97%, reflecting the lack of a bargain-fueling event to boost investors’ muted attitude.
According to credit rating agencies, bond investors maintained tight positions in the face of economic uncertainty, erratic returns, and sporadic profit-taking.
Citing low trading activity in the secondary market, the investment business claimed that the average yield closed flat at 16.97% at the end of the trading session.
The average yield increased at the short (+1 basis point) end of the benchmark curve due to profit-taking activity on the March 2027 FGN bonds (+2 base points, bps), according to Credit Rating Services. At the mid and long portions, the yield did not alter.
Selloffs on the February -34 paper caused yields to marginally decline at the mid-segment (-3bps) across the curve. Mid-term market action was optimistic. Nigerian bonds with 2031 and 2033 maturity dates saw a steep decline in yields. However, a few transactions were carried out.
“The Treasury bills market ended the session on a bearish note, with the average yield increasing by 8bps to settle at 18.72%,” according to the Credit Rating Services.
Long-dated papers continued to be the main source of demand (+14bps), with the freshly released 1-year Treasury bills being the most actively traded product. There was little action in the FGN bonds market for the majority of the week. Although there were few volumes, there was early interest in the 2029s, 2031s, 2033s, and 2053s.
“Slightly later, activity increased, with buying in the 2031s and 2033s lowering yields by 25 and 40 basis points, respectively.”
