Nigerian Bonds Yield Climbs 13bps as Risk Appetite Shifts
The benchmark yield on the Federal Government of Nigeria (FGN) bonds increased 13 basis points in the secondary market as investors trimmed their portfolios.
The local bond yield direction reflects negative sentiment toward naira assets, a development that continues to affect fixed-income market direction amid tight government borrowing.
The Debt Management Office (DMO) bond supply is anticipated to accelerate ahead of the 2027 election. Bond supply has been relatively tight, with DMO tight-fisted rate pricing year-to-date across monthly bond auctions.
The average yields surged 13 bps to 16.68% on Wednesday, pointing to significantly dampened domestic investor confidence and a notable weakening in appetite for naira-denominated sovereign debt.
Traders reported yield expansions at the short (+20bps), mid (+11bps) and long (+3bps) segments of the curve. In a chat with MarketForces Africa, asset managers said there have been significant shifts in debt market investment as pension funds increase bets on equities.
Fixed income market analysts said the direction of yields depends on the level of liquidity in the financial system, the inflation outlook, and general market risk sentiment. #Nigeria’s Foreign Reserves Top $50bn, Increase by $4.54bn
