SAT JULY 19 2025-theGBJournal| The FGN bond secondary market moved lower on Friday driven by demand from local investors, and as investors anticipates the outcome of the upcoming MPC meeting.
Overall, a total of 34,523 units valued at N31.470 million were traded this week in 33 deals compared with a total of 66,289 units valued at N69.244 million transacted last week in 26 deals.
The average yield consequently, declined by 29bps to 16.5%.
Across the benchmark curve, the average yield declined at the short (-55bps), mid (-25bps) and long (-17bps) segments, driven by the demand for the MAR-2027 (-119bps), FEB-2034 (-51BPS) and JAN-2042 (-46bps) bonds, respectively.
The upcoming MPC meeting is expected to shape the direction of bond yields across all market segments.
Traders also expects investors to explore the option of coupon re-investment, in a bid to exploit the current level of bond yields.
Similarly, the Treasury bills secondary market maintained bullish strides, as investors continued to price in possible monetary policy easing in the upcoming Monetary Policy Committee (MPC) meeting, slated for 21 and 22 July 2025.
As a result, average yield across all instruments declined by 20bps to 21.3%. Across the market segments, the average yield declined by 53bps to 18.3% in the NTB segment and expanded by 19bps to 24.5% in the OMO segment.
Meanwhile, the overnight (OVN) rate expanded by 50bps w/w to 32.7%, as the financial system’s liquidity weakened further, despite inflows from FGN bond coupon (N65.36 billion).
Due to the absence of key inflows (particularly from FAAC remittances), average system liquidity tightened further to settle at a net short position (N465.18 billion) compared to a net long position of N148.29 billion in the previous week.
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