Fixed Interest Investors Bullish on FGN Bonds, T-Bills



Fixed Interest Investors Bullish on FGN Bonds, T-Bills
Nigerian naira

Fixed Interest Investors Bullish on FGN Bonds, T-Bills

The secondary market for government-traded instruments experiences pendulum-like swings in as FGN Bonds, and Treasury bills rally despite liquidity strain in the financial system.

Activities in the Treasury bills secondary market were bullish. Across the curve, analysts said the average yield was unchanged at the short and mid segments but contracted at the long (-7bps) end.

The shift in the yield curve followed buying interest in the 337-day to maturity (-56bps) bill. Elsewhere, the average yield was flat at 4.0% in the OMO segment. Detail from the local debt capital market showed that the FGN bond also traded bullish.

Across the benchmark curve, the average yield declined at the short (-6bps) end as market participants demanded the MAR-2024 (-46bps) bond. However, the yield on FGN bonds was flat at the mid and long segments. Traders said offers at the near and mid ends submerged moderate bids at the far end.   

Particularly noted is the fact of paltry offers reported on Mar-25 (+10bps) and Apr-37 (+10bps) maturities submerged bids for Apr-49 (-7bps). As a result, the average benchmark yield closed relatively unchanged at 14.22%.  Profit takers exited securities across the Eurobond curve, to halt the 7-day dominance of the bulls.

Offers were especially visible at the near end of the curve – Jul 23 (+140bps) and Mar-29 (+43bps) – although all benchmark securities saw sizeable exit orders. As a result, the average benchmark yield jumped 49 basis points to 12.28%. Today, US 10-year Treasury yield cleared 8bps lower to 3.35%.

In the Treasury space, the market reported paltry bids on Dec-23 and Mar-24 bills. As a result, the average benchmark yield inched lower by a basis point to close at 7.99%.

Meanwhile, the OMO bills secondary market stayed quiet throughout the trading session as liquidity condition remains depressed. As a result, the average benchmark yield closed flat at 4.01%.

In the absence of any significant inflow into the system, analysts hint about an expectation for trading sentiment in the fixed income space to remain bearish.

In the money market, Open Repo Rate closed at 18.63% on Wednesday, while Overnight Rate advanced by 25 basis points to close at a market cap level- 19.00%. #Fixed Interest Investors Bullish on FGN Bonds, T-Bills

Naira Steadies as Banks Issue Update on FX Purchase

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