Nigeria Bonds Yield Sinks to 16% on Broad-Based Demand
The average yield on Nigerian government bonds declined to about 16% as a result of broad-based demand in the secondary market. The yield on government has been slowing down, and the market expects the trend to continue in reaction to the monetary policy interest rate cut.
Buying interest experienced last week was supported by excess liquidity in the financial system and positive investors’ sentiment for naira assets amidst disinflation expectation.
Trading activities was all positive as investors continue to lock-in yields in anticipation of lower spot rate on Q4 bonds supply.
Trading activity was robust across all tenors, reflecting improved market sentiment and sustained appetite for fixed-income securities amid lingering uncertainties in other asset classes.
This broad-based demand exerted mild downward pressure on yields, with the average yield falling by 29 basis points to 15.98% for the week, Cowry Asset Management Limited said in a note.
Across the curve, the average yield declined at the short (-44 bps), mid (-28 bps), and long (-32 bps) segments, Cordros Capital Limited highlighted.
The bonds yield contraction was driven by demand for the JAN-2026 (-83 bps), JUL-2034 (-57 bps), and MAR-2036 (-6 bps) bonds, respectively.
“We expect demand in the FGN bond secondary market to remain strong, owing to the robust system liquidity and the recent policy rate cut.” We also reiterate our expectations of a cautious stance at the long end of the curve, amid persistent concerns over fiscal sustainability and heightened duration risk,” Cordros Capital stated.
Activity started off slow, with minor adjustments at the mid-segment, before strong buying interest—particularly in the short-mid tenor maturities—drove yields lower on Tuesday.
While midweek saw some profit-taking in mid-tenor papers, long-dated bonds (2049–2053) remained firm, consistently recording yield declines. This continued till Thursday, as renewed demand at the long end offset mild selloffs in the middle of the curve.
The week closed on a stable note. Overall, the market maintained a bullish tone, with the average benchmark yield dropping, driven by sustained demand and moderate portfolio rebalancing. FG Threatens ASUU With ‘no Work, no Pay’ Policy
