Investors Take Profit on Bonds as Treasury Bill Rate Rises
The average yield on Nigerian government bonds rose in the secondary market as investors’ sentiment waned amidst rising spot rates in the treasury bills segment, up by 1.91% in two weeks.
Not minding disinflation, the Apex Bank increased its discount rate on Nigerian Treasury bills with a one-year tenor to 17.95% at the main auction conducted on Wednesday.
The successive spot rate adjustment for the short-term investment securities from 16.04% two weeks ago disrupts investors’ sentiment in the bonds’ secondary market space.
The market experienced sell pressures at the short (+13 bps) and mid (+10 bps) segments of the yield curve, investment firms reported in their separate notes released.
Specifically, notable yield expansions were observed across the federal government of Nigerian bonds maturing in 2027, 2028, and 2032. As a result, average yields expanded by 8 bps to close at 16.70%.
Trading reviewed showed that the short end saw sustained selling pressure, with most yields widening by over 50 bps, except the 26-Apr-29, which strengthened by 20 bps to 17.11%, AIICO Capital Limited said in a note.
In the mid-tenor segment, analysts noted that the FGN bonds that will mature in 21-Feb-2031 and 27-Apr-2032 enjoyed moderate demand.
These asset yields eased by 5bps and 6bps to 17.33% and 17.14%, respectively, while mild caution pushed the 25-Jun-33 yield up by 96 bps to 17.11%.
Activity was subdued at the long end, except for the 21-Jan-42, which rose slightly by 1 bp to 15.73%. Overall, the average benchmark yield spiked by 8 bps to 16.70%.
Fixed income market analysts attribute recent sell-offs to investors likely reducing their exposure ahead of next week’s Bond auction slated to be held on Monday, 15-Dec-25. FCMB Group Forecasts N62.55 billion Profit for Q1-2026
