SAT JAN 25 2025-theGBJournal| In the FGN bond secondary market this week, market participants continued to aggressively offload securities in anticipation of higher yields at next week’s auction.
Hence, the average yield increased by 65bps to 20.7%. Across the benchmark curve, the average yield increased at the short (+87bps), mid (+27bps), and long (+92bps) segments following selloffs of the JAN-2026 (+249bps), APR-2032 (+81bps) and MAR-2035 (+189bps) bonds, respectively.
Next week, we believe the direction of yields in the secondary market will be shaped by the outcome of this month’s FGN bond auction holding on Monday (27 January).
At the auction, the DMO is set to offer instruments worth NGN450.00 billion through re-openings of the APR-2029 and FEB-2031 bonds, as well as a new JAN-2035 issue.
Over the medium term, we expect yields to moderate, consequent on the anticipated monetary policy administration and slower borrowing pace by the Federal Government.
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