Bond Yield Settles at 19.75% ahead of 2025 Supply
The average yield on Nigerian government bond settled at 19.75% as a result of subdued trading activities in December ahead of fresh supply in 2025. In the secondary market, the local bonds market experienced another quiet session, with most interest directed toward the February 2031, May 2033, February 2034, and June 2053 papers.
Across the benchmark curve, the average yield pared at the short (+1bp) end as investors trimmed their portfolios to reposition in high return assets. Traders explained that there was profit-taking activities on the JAN-2026 (+2bps) bond, but closed flat at the mid and long segments.
Ahead of more than N7 trillion bond issuances to part finance 2025 budget deficit, fixed income traders advised investors to shift focus on long-term government bonds, which currently offer coupon yields of about +19%. The market opened the week on a subdued yet pessimistic note as investors continued to sell off their holdings in moderate volumes across the yield curve.
The mid-segment of the curve bore the most significant pressure, with the closing yields on the Apr-32 and May-33 securities rising to 18.60% and 20.80%, respectively, TrustBanc Financial Group said in a note.
Traders said despite this activity, the average benchmark yield remained unchanged as market closed the year on a cautious and quiet note.
Federal Government is expected to borrow about N9.16 trillion from the domestic market, CardinalStone Limited said in a note. “If we assume the issuance of N2.0 trillion in dollar-denominated bonds, the balance of N7.16 trillion, which is likely be met by a split of NTB and bonds, is lower than the domestic Naira-denominated issuances of 2024”, the firm said.
Overall, the firm expects yields to be mostly stable in the first half of 2025 before moderating in the second half and therefore favour stronger allocations to duration. #Bond Yield Settles at 19.75% ahead of 2025 Supply NGX Index Dips Intraday as Investors Book Profit in ARADEL, NB
