Nigerian Bonds Yield Hits 20% as DMO Releases Auction Plan
In the secondary market, the Federal Government of Nigerian (FGN) bonds benchmark yield crossed 20% for the first time in a long time due to sell pressures, spooked by rising headline inflation.
The local bond market was rocked with bearish sentiments as sell-offs were predominant at the mid-segment of the curve, investment firm CardinalStone Limited said in a note.
The market witnessed sell pressure on the JUL-34 paper, causing its yield to rise by 138 basis points on the day. Profit-taking activities were also witnessed at the belly of the yield curve.
AIICO Capital Limited said in its note that demand was observed on Feb 2031 and Feb 2034 papers, while offers were seen on June 2038 and June 2053 papers. However, overall activity diminished as sellers emerged, prompted by the release of the Q1 2025 FGN bond issuance calendar by the DMO.
Even with the bearish pose, trading volume remained subdued, with a limited number of transactions occurring. Across the benchmark curve, the average yield advanced at the short (+1 bp) and mid (+42 bps) segments.
The yield surge followed selloffs of the JAN-2026 (+3bps) and JUL-2034 (+138bps) bonds, respectively. Yield, however, retreated at the long (-8 bps) end due to buying interest in the APR-2037 (-71 bps) bond. Hence, the average yields expanded by 7 bps to settle at 20.04%.
Nigeria may be raising up to N1.8 trillion in the first quarter of 2025, according to details from the Debt Office first quarter auction schedule. DMO plans to issue three offerings in the first quarter per monthly auction.
These include the re-opening of the bond maturing on April 17, 2029; a re-opening of the bond maturing on February 21, 2031; and a newly issued bond maturing in January 2035. #Nigerian Bonds Yield Hits 20% as DMO Releases Auction Plan FBN Holdings Records Huge Off-Market Shares Transactions
