Nigeria Bond Yield Sinks Below 17%, Subsidy Savings Ease Offer
The Federal Government of Nigeria (FGN) bond market ended the session on a mildly positive note, as yields declined across key maturities, leading to a sharp reduction in the average yield in the secondary market.
On Tuesday, the benchmark yield on Nigerian government bonds fell below 17% in the secondary market due to aggressive purchases from asset and wealth managers, including activities of pension fund administrators.
The market supply is expected to remain tight in the third quarter of 2025 as the government shifted attention from the local debt capital market for borrowing. Some market analysts attribute the development to subsidy savings, including improved government earnings from oil and non-oil exports.
The market experienced increased and sharp demand for the local bond as the Debt Management Office’s (DMO) third-quarter borrowing calendar affirmed lower supply expectations.
The DMO bond auction plan for Q featured a reopening of the Apr-2029 and Jun-2032 papers, with a reduced offer range of N40–N60 billion, reinforcing expectations of limited supply, fixed income market analysts said in their separate report.
Due to heated-up bargain hunting in the secondary market, the average yield declined by 18 basis points (bps) to close at 16.94%, according to TrustBanc Financial Group Limited. Last week, the fixed income market closed the week on a bullish note, buoyed by strong investor sentiment and a growing consensus that the Central Bank (CBN) may ease monetary policy later this month.
With inflation showing signs of moderation, investors moved swiftly to lock in yields at current levels before any potential rate cuts begin to compress returns. Bond market analysts said they expect market sentiment to be primarily influenced by expected inflation moderation as well as demand and supply dynamics. #Nigeria Bond Yield Sinks Below 17%, Subsidy Savings Ease Offer Bond Yield Eased to 18.38% as Investors Boost Holdings
