Foreign investors pull bids worth 106.37 bln for Nigerian bonds as yields spikes

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Investors put in a total of 99 bids worth N106.37 billion for the 15-year paper this week, compared to 67 bids worth N90.89 billion at the December auction for the same tenor.

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A total of N146.44 billion in bids were placed across the 2 tenors (15-year and 25-year) at the January auction, compared to N134 billion in December.

While investor demand has grown in the run-up to the DMO auction, the action has largely been from domestic institutional investors and Pension Funds as foreign investors remain on the sidelines, put off by bond yields still ways below inflation.

“High inflation, low bond yields and non-smooth functioning of the foreign exchange market means foreign portfolio investors won’t come back in a big way. There will need to be an adjustment to the current low interest rate environment,” said Razia Khan, Africa economist at Standard Chartered Bank.

Yields on benchmark 15-Year securities due 2035 rose to 8.74 percent at a government auction held Wednesday (Jan 20), up 170 basis points compared to the last auction in December, to trade around the highest level in about four months, according to data.

The Benchmark 25-year bonds due 2045 sold at a marginal rate of 8.95 percent up some 195 basis points from the last auction in December, according to data from the Debt Management Office (DMO).

The last time yields were this high at a primary auction was in September 2020, when the DMO allotted just N6.81 billion of the N40 billion on offer to investors for the 25-year paper at 8.9 percent and N25.43 billion of the N40 billion on offer for the 15-year paper at 8.52 percent,

Godwin Okafor, The Naija247news
Godwin Okafor, The Naija247newshttps://naija247news.com
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.

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