Nigerian bond yields seen up on election spending

NIGERIA, Africa's biggest economy hold presidential elections on Feb. 14 and spending by politicians to woo electorates could spill over into the fixed market.

"The expectation is that yields should be on the upward trend as we move toward election. We are expecting to see an increase in liquidity levels and some of it coming into the bond market," one dealer said.

Traders said secondary market trading remained subdued because of uncertainty around the election, while the initial buying of the 2024 tenor debt note by some lenders has declined.

Nigeria plans to raise 90 billion naira ($465.72 million) in sovereign bonds with maturities ranging between five and 20 years at its next regular auction on Feb. 11.

The 5-year debt note is a fresh issue, while the 10-year and 20-year bonds are re-openings of previously issued paper.

Traders said interest in the new issue could rise, while returns on the paper is expected to set the benchmark for the pricing of other bond tenors at the secondary market.

Yields on the 2016 debt note fell to 14.99 percent from 15.03 percent last week. The 2022 paper was trading at 15.21 percent against 15.20 percent, while the 2024 bond was trading around 15.21 percent against 15.06 percent last week.