Nigeria’s bonds are expected to rise slightly over the week, and local pension are expected to be well positioned at the auction of the bonds, traders have indicated.
The development is expected to be in tandem with the last week’s market sentiment, and some offshore investors and local pension are believed to have positioned themselves ahead of the auction.
Traders said some offshore and local pension were shielding weight ahead of bids at the auction on Wednesday, where N100 billion ($614.06 million) in 3, 10 and 20-year bond will be offered by the Debt Management Office (DMO).
“Most offshore investors and local pensions are selling down their holdings in preparation to take position at the auction next week,” one dealer said.
Dealers said bonds bought at the auction usually attracted better returns for investors, hence the sell-off ahead of the auction on the secondary market.
Yields have climbed around 50 basis points across the board on the most active traded bonds on the secondary market this week due to profit taking by investors, traders said.
It was gathered that Nigeria’s 2022 maturity was trading at 20.11 bid on Friday, while the 2024 paper was at 12.17 per cent, both around 50 basis points higher than they opened on Monday.
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