Nigerian Bonds Yield Nears 19% Ahead of Supply, Inflation
The average yield on Nigerian government bonds inched near 19% in the secondary market as investors trimmed holdings. The bond market ended on a bearish note; the investors’ activity was observed at the short (-3 bps) and mid-segment (+7bps) of the curve.
Trades were mixed generally but with a bearish undertone that shifted the yield curve upward ahead of the release of the rebased consumer price index that measures Nigeria’s inflation rate movement this week.
Traders said foreign portfolio investors (FPIs) drove the selling rally in the secondary market, and the majority of transactions conducted played out at the mid-segment of the yield curve.
Although system liquidity remained robust, investors’ sentiment was largely cautious, traders said in a note. The trading floor saw only a handful of deals, mainly concentrated on the 2029, 2033, and 2035 maturities, TrustBanc Financial Group Limited reported.
Trading activity was thin, with limited interest focused on select papers such as Feb 2031, May 2033, and Jun 2053. Mid-week sessions saw slight demand for Mar 2027 and Jan 2035 papers, but volumes remained low overall.
Sellers dominated the short- to mid-tenor segment towards week’s end, especially on the Apr 2029 and Feb 2031 bonds. Traders attribute this to sustained risk-off sentiments among offshore/onshore investors, driven by concerns over Trump’s tariff policies and lingering debt sustainability concerns (amid weaker oil prices).
Despite some cherry-picking by market participants at the belly of the curve, the average mid-yield rose by 38 bps week on week, closing at 18.86%. “We expect activities in the bond market to remain calm as market participants await the release of the second quarter of 2025 bond auction calendar,” TrustBanc added.
Cordros Capital Limited reported that the average yield increased at the short (+19 bps) and mid (+3 bps) segments. The yield expansion was due to selloffs of the JAN-2026 (+45bps) and FEB-2031 (+64bps) bonds, respectively, while it closed flat at the long end.
Over the medium term, analysts said they expect a moderation in bond yields, which is expected to be influenced by an anticipated dovish monetary policy stance and sustained improvement in demand and supply fundamentals in Q2-25. #Nigerian Bonds Yield Nears 19% Ahead of Supply, Inflation First Holdco Falls below N1 Trillion in Equities Market
