Bonds Yields Steady as Investors Anticipate Q1 Supply
Trading activities on Nigerian government bonds closed on a softer note at the secondary market with mixed movements across the curve. Investors’ appetite remained subdued in the post-monthly auction reaction and expectation of increased supply in Q1 2026.
The market anticipates significant local debt capital borrowing in 2026 as the government budget deficit widens amidst tight fiscal performance.
Traders have switched to cautious mode, weighing the recent spot rates repricing signals, disinflation and possible monetary easing in Q1.
Trading activities on the short end, the 22-Jan-2026 bonds yield edged lower by 1bp to close at 18.60%, while the 20- Mar-26 saw a sell-off, pushing yields higher by 8bps to 16.69%
At the belly of the curve, trading was relatively muted. Marginal sell-offs on the 23-Feb-28 and 22-May-29 papers drove yields higher by 1bp each to 16.94% and 17.02%, respectively.
On the long end, activity remained subdued, with most papers trading unchanged. However, slight sell-offs on the 18-Jul-34 and 27-Mar-35 papers pushed yields higher by 1bp each to 16.88% and 16.77%, respectively.
As a result, the average benchmark yield closed unchanged at 16.70%. Trading activities have been tightened after the Debt Management Office monthly auction for December, where ₦596.47 billion was sold across the FGN 2030 and 2032 at marginal rates of 17.20% (+130 bps) and 17.30% (+130 bps).
