Yield on Nigerian Bonds Settles at 19% after Fresh Supply
Nigerian government bonds yield climbed slightly to 19% in the secondary market following post-primary market sell pressure. In the secondary market, traders’ sentiment was relatively bearish. Market participants sold off short-dated bonds, further reflecting investors’ cautious bias for duration exposure.
As a result, the average yield expanded by 2 basis points to close the just concluded week at 19.0%. Fixed income market analysts at Cordros Capital Limited said the average yield increased at the short (+14 bps) end.
The yield surge was driven by selloffs of the JAN-2026 (+56 bps) bond. However, yield decreased at the mid (-3 bps) and long (-1 bps) segments, following demand for the FEB-2031 (-15 bps) and JUN-2053 (-11 bps) bonds, respectively.
At the primary market auction last week, the Debt Management Office (DMO) offered instruments worth N350.00 billion to investors through re-openings of the 19.30% FGN APR 2029 and 18.50% FGN MAY 2033 bonds.
Total subscription level settled at N495.95 billion, tracking below N530.31 billion, with a bid-to-offer ratio of 1.4x, below 1.8x at the previous auction. Eventually, the DMO allotted instruments worth N397.89 billion across the two tenors, resulting in a bid-to-cover ratio of 1.3x. Non-competitive allotment totalled N123.00 billion, according to auction results.
Following the auction, buying interest picked up in mid-curve papers in the secondary market, which had remained subdued. Steady demand was seen for the Apr 2029, Feb 2031, and May 2033 maturities, though overall volumes stayed muted. Toward week’s end, activity slowed again at the belly of the curve, pushing average mid-yield downward.
Analysts anticipate the bond market may trade sideways as investors digest the recent auction. Demand could hold in mid- to long-dated papers, though caution may persist ahead of the next MPC meeting.
Over the medium term, fixed income market analysts said they expect a moderation in bond yields, influenced by the anticipated dovish monetary policy stance and demand and supply dynamics. #Yield on Nigerian Bonds Settles at 19% after Fresh Supply Nigeria’s Private Sector Output Growth Hits 15-Month High –PMI
