Nigeria’s last bond auction of the year next week may attract significant interest from Pension Funds Administrators’ (PFA) companies wanting to lock in some of their funds although yields are likely to remain broadly flat. 

Nigeria said it would auction 64.10 billion naira ($397 million) in 10-year sovereign bonds with different maturity dates on Dec. 14 at its last monthly debt auction this year. 

Traders said most pension fund administrators had been unable to invest at the secondary market because of the non-availability of long-tenor paper. 

“We are going to see significant interest at the auction by most PFA companies, which ordinarily should drag down yields but most banks may not participate at the auction and this means yields should remain broadly flat or a little below last auction,” one dealer said. 

Ten-year paper sold at 16.50 percent at the November debt auction. 

Dealers said trading on the secondary market remained quiet, with yields closing broadly flat because banks were holding on to their positions as the market winds down for the year end. 

Three-year and 5-year bonds were the most actively traded with yields closing at 15.34 percent and 14.17 percent respectively, in line with their previous close.   

Source: Reuters/Oludare Mayowa