As Yield Declines, Buying Interests Dominate Bond Market

The Federal Government bonds market was dominated by buying interests last week as investors took advantage of the attractive yields across the curve.

Average yields across all tenors declined by 42 basis points week-on-week to close at 13.9 per cent on Friday.

Major buying interests were witnessed at the short and medium-end of the curve, particularly the 12-Apr-19, 17-May-19 and 14-Mar-24 maturities.

The FGN bonds market, on Friday, traded on a relatively flat note with no active trades recorded during the session, even as the market reaction to the inflation report by the National Bureau of Statistics remained relatively muted.

Analysts at Zedcrest Capital Limited said despite the N91bn expected in coupon payments this week, they expected yields to remain relatively flat as market players looked forward to the FGN bond auction scheduled to hold in the last week of the month.

They said the market was expected to remain stable in the near term, as the Central Bank of Nigeria was expected to maintain its spate of Open Market Operation issuances to control excess system liquidity when necessary.

They added that the relatively robust demand interests for Treasury bills were also expected to be sustained this coming week.

“Investors are advised to cherry-pick and take position in bonds trading at a discount and with attractive yields across the curve, which are mostly the 2019s and 2020s bills,” analysts at Afrinvest Securities Limited said.