Key Takeaways
- • The DMO allotted N1.21 trillion of reopened FGN bonds against a N1.75 trillion offer, with total subscription of about N1.75 trillion according to MarketForces Africa's report of the October auction.
- • Stop rates on the FEB-2034, SEP-2036 and JUN-2038 reopenings were 16.99%, 17.29% and 17.19%, up from 15.50%, 16.79% and 16.85% at the previous auction.
- • The secondary-market benchmark yield rose 8 basis points to 16.42% on Monday, as traders reported sell pressure at the mid (+9bps) and long (+17bps) segments of the curve, per CardinalStone Securities.
- • Post-auction offer yields sat below stop rates on all three instruments, with the 2036 and 2038 maturities showing the widest gaps, according to Herwood Securities.
- • Herwood expects measured trading and selective buying at attractive yield levels, with attention focused on the 17.10%-17.15% offer range for the 2036 and 2038 maturities.
Summary
The benchmark yield on Nigerian government bonds rose 8 basis points in the secondary market on Monday to 16.42%, amid risk-off sentiment following the Debt Management Office's monthly auction, according to MarketForces Africa.
The DMO offered N1.75 trillion in reopened bonds across the FEB-2034, SEP-2036 and JUN-2038 maturities, drawing queues of portfolio and asset managers at the primary auction. Total subscription was about N1.75 trillion, and the authority allotted N1.21 trillion of reopened bonds at stop rates of 16.99%, 17.29% and 17.19%. Those stop rates were higher than the 15.50%, 16.79% and 16.85% recorded at the previous auction.
Herwood Securities Limited reported that post-auction offer yields were quoted at 16.90% for the FEB 2034, 17.15% for the SEP 2036 and 17.10% for the JUN 2038. All three instruments traded at offer yields below their stop rates, with the 2036 and 2038 maturities showing the more notable differences. Market activity was measured as participants assessed the results and repriced offers.
CardinalStone Securities Limited said traders reported sell pressure in the mid (+9bps) and long (+17bps) segments of the curve, which lifted the average yield by 8 basis points to 16.42%.
Herwood's fixed income analysts expect attention to stay on the 2036 and 2038 maturities as investors weigh post-auction offer levels in the 17.10% to 17.15% range. They anticipate selective buying at attractive yields rather than aggressive positioning, with trading expected to remain measured while the market awaits further direction from demand and yield movements.
The DMO offered N1.75 trillion in reopened bonds across the FEB-2034, SEP-2036 and JUN-2038 maturities, drawing queues of portfolio and asset managers at the primary auction. Total subscription was about N1.75 trillion, and the authority allotted N1.21 trillion of reopened bonds at stop rates of 16.99%, 17.29% and 17.19%. Those stop rates were higher than the 15.50%, 16.79% and 16.85% recorded at the previous auction.
Herwood Securities Limited reported that post-auction offer yields were quoted at 16.90% for the FEB 2034, 17.15% for the SEP 2036 and 17.10% for the JUN 2038. All three instruments traded at offer yields below their stop rates, with the 2036 and 2038 maturities showing the more notable differences. Market activity was measured as participants assessed the results and repriced offers.
CardinalStone Securities Limited said traders reported sell pressure in the mid (+9bps) and long (+17bps) segments of the curve, which lifted the average yield by 8 basis points to 16.42%.
Herwood's fixed income analysts expect attention to stay on the 2036 and 2038 maturities as investors weigh post-auction offer levels in the 17.10% to 17.15% range. They anticipate selective buying at attractive yields rather than aggressive positioning, with trading expected to remain measured while the market awaits further direction from demand and yield movements.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.