Nigerian Bond Yield Slumps, Capital Outflow Risk Heightens
Capital outflow risk heightened in the secondary market for Nigerian bonds as yield continues to fall. On Monday, the federal government of the Nigerian bond market rallied further at the beginning of the week as investors anticipated lower supply for the third quarter and possible rate adjustments to reflect moderating rates on the naira assets.
In a separate market update, investment bankers said investors positive sentiments were observed in the bond market, with activities seen across the curve, particularly the mid-segment (-10 bps) and long-end (-17 bps).
Notable flows were seen across the Nigerian bonds maturing in 2033, 2034, and 2053. Investors bets across the curve dragged average yields down by 4 bps to settle at 17.50%.
Analysts reported that bond market investors continue to lock in yields, with strong demand across maturities, especially the Feb 2031 and May 2033, which saw yields drop 40 basis points (bps) from Friday’s levels.
Investors reacted to the Debt Management Office borrowing plan, which suggests that the offer will remain tight in the third quarter, just like the previous experience in the past quarters.
The authority released its Q3 2025 bond issuance calendar, announcing re-openings of the 17 April 2029 and 25 June 2032 papers. The positive momentum is likely to extend, while some investment firms are betting that declining yields on naira assets could trigger capital outflow.
“Foreign investors in the fixed income market may convert their naira portfolio to US dollars as the yield on government borrowing instruments continues to decline”, experts told MarketForces Africa in separate market discussions.
Across the benchmark curve, the average yield expanded at the short (+8 bps) end, driven by the selloffs of the JAN-2026 (+39 bps) bond.
The yield contracted at the mid (-8 bps) and long (-17 bps) segments, driven by demand for the MAR-2035 (-20 bps) and MAR-2050 (-30 bps) bonds, respectively. #Nigerian Bond Yield Slumps, Capital Outflow Risk Heightens Nigerian Postal Service Denies Drug Peddling Rumour
