Access Bank Highlights Rising Investor Confidence in Nigerian Bonds Despite Liquidity Challenges
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Access Bank has observed a renewed interest in Nigerian government bonds, even though the financial market is currently facing liquidity constraints. This suggests that investors are regaining confidence in the economy, especially in fixed income instruments like FGN Bonds and Treasury Bills.
Kolawole Komolafe, Treasury Team Lead at Access Bank, explained during a live CNBC Africa interview that while the surge in demand is cautious, it reflects a positive shift in market sentiment. Investors appear to be adjusting their strategies based on stabilising macroeconomic indicators and the attractive returns (yields) available in the bond market.
Key Highlights:
• Rising Bond Demand:
There’s been an increase in investor activity, especially in medium- to long-term bonds. Benchmark bonds like the FGN 2031 and 2033 were in focus, with yields quoted at 16.90% and 16.70% respectively. The average bid for bonds rose by 10 basis points, indicating stronger investor interest.
• Treasury Bills and OMO Activity:
In the short-term debt market, the OMO paper maturing on March 17, 2026 was the most traded, with its yield climbing from 20.20% on Friday to 20.50% by Monday.
Investors also showed interest in the new 1-year NTB issued on July 9, trading around 15.45%.
• Liquidity Concerns in the Money Market:
Komolafe highlighted that the system is currently running a repo position of N250 billion, meaning banks are borrowing short-term to meet obligations. This is causing overnight interest rates to jump above 32%, a clear sign of tight liquidity.
• Foreign Exchange Market:
The FX market has experienced some volatility due to profit-taking by foreign direct investors (FDIs). However, recent interventions by the Central Bank of Nigeria (CBN) have helped stabilise the naira and restore some order. ⚖️
️
Access Bank has observed a renewed interest in Nigerian government bonds, even though the financial market is currently facing liquidity constraints. This suggests that investors are regaining confidence in the economy, especially in fixed income instruments like FGN Bonds and Treasury Bills.
Kolawole Komolafe, Treasury Team Lead at Access Bank, explained during a live CNBC Africa interview that while the surge in demand is cautious, it reflects a positive shift in market sentiment. Investors appear to be adjusting their strategies based on stabilising macroeconomic indicators and the attractive returns (yields) available in the bond market.
Key Highlights:
• Rising Bond Demand:
There’s been an increase in investor activity, especially in medium- to long-term bonds. Benchmark bonds like the FGN 2031 and 2033 were in focus, with yields quoted at 16.90% and 16.70% respectively. The average bid for bonds rose by 10 basis points, indicating stronger investor interest.
• Treasury Bills and OMO Activity:
In the short-term debt market, the OMO paper maturing on March 17, 2026 was the most traded, with its yield climbing from 20.20% on Friday to 20.50% by Monday.
Investors also showed interest in the new 1-year NTB issued on July 9, trading around 15.45%.
• Liquidity Concerns in the Money Market:
Komolafe highlighted that the system is currently running a repo position of N250 billion, meaning banks are borrowing short-term to meet obligations. This is causing overnight interest rates to jump above 32%, a clear sign of tight liquidity.
• Foreign Exchange Market:
The FX market has experienced some volatility due to profit-taking by foreign direct investors (FDIs). However, recent interventions by the Central Bank of Nigeria (CBN) have helped stabilise the naira and restore some order. ⚖️