Nigeria's bonds yields set to fall

Yields on Nigerian bonds are seen dropping across the board next week in anticipation of increased liquidity in the banking system from retired Treasury bills and refunds from cash reserve requirements (CRR).

Nwankwo, DMO boss

"The market is very liquid now because of the injection of cash from matured treasury bills and expectations of additional liquidity from CRR refunds by the central bank," one dealer said.
Nigeria's central bank said it will inject an additional 300 billion naira ($1.5 bln) into the banking system after it cut the cash reserve requirement to 25 percent from 31 percent last week.
"Pension funds and banks are expected to rev up buying of fixed income assets next week because of the increase in available cash in the system," another dealer said.
U.S. investment bank JP Morgan removed half of the Nigerian bonds listed on its emerging markets bond index (GBI-EM) on Wednesday, but dealers said the market had priced in the impact prior to the move.
Yields on the benchmark 2024 paper rose to 15.12 percent on Friday from 14.74 percent last week, while the longest tenor paper rose to 15.04 percent against 14.97 percent.
Dealers said yields should fall to below 15 percent week when more liquidity hits the banking system.