SAT MARCH 29 2025-theGBJournal| The FGN bond secondary market was bullish this week, with the average yield declining by 3bps to 18.7% by close of trade Friday.
Cordros Research analysts attribute this to secondary market bids by investors who lost out on the auction amid the sizeable non-competitive allotment of N152.45 billion (36.0% of total allotment).
Across the benchmark curve, the average yield decreased at the short end (-34bps) following demand for the MAR-2027 (-43bps) bond, while it advanced at the mid (+8bps) and long (+20bps) segments driven by selloffs of the APR-2032 (+15bps) and MAR-2035 (+48bps) bonds, respectively.
At Monday’s PMA, the Debt Management Office (DMO) offered instruments worth N300.00 billion to investors through re-openings of the 19.30% FGN APR 2029 (Bid-to-offer: 0.3x; Stop rate: 19.00%) and 18.50% FGN MAY 2033 (Bid-to-offer: 4.7x; Stop rate: 19.99%) bonds.
Total subscription levels settled at N530.31 billion (previous: N1.63 trillion), with a bid-to-offer ratio of 1.8x (previous: 4.7x).
Eventually, the DMO allotted instruments worth N423.68 billion across the two tenors, resulting in a bid-to-cover ratio of 1.3x.
Over the medium term, we expect a moderation in bond yields, influenced by two factors – the anticipated dovish monetary policy stance and shifts in demand and supply dynamics.
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