Nigerian Bonds Yield Rises to 18.9% Ahead of Q2 Supply
The secondary market for FGN bonds closed on a negative note, with the average yield edging up by a basis point to 18.86%, reflecting mild bearish sentiment ahead of the second quarter of 2025 supply.
Trading activity in the local bonds market remained subdued with a slightly negative bias, as sellers dominated the short-to-mid tenor segment—especially on the Apr 2029, Feb 2031, and May 2033 papers.
There were few selloffs on the long end of the curve, where investors sold off the JUN-53 (+31 bps). Across the benchmark curve, the average yield expanded at the short (+1bp) and long (+4bps) ends. The expanded yield was driven by the sell pressures on the JUL-2030 (+1bp) and JUN-2053 (+31 bp) bonds, respectively.
Fixed income market analysts said the average yield closed flat at the mid segment. But the short end of the benchmark yield curve experienced a slight upward shift of 1bp, driven by modest selling activity on the Apr-29 paper.
Traders said the long end faced more significant pressure, with the June 2053 bond yield rising by 31 bps. The mid-section of the curve, however, saw muted trading activity.
Despite activities on the 29s and 53s, overall trading volume remained subdued, as investors remain watchful of policy cues and liquidity shifts, TrustBanc Financial Group Limited said in an investors’ note.
Market analysts said the bond market will remain subdued amidst expectations of aggressive borrowings in the second quarter due to strain on Nigerian government finances.
In an update, CardinalStone Limited said the Naira fixed-income market bucked the trend witnessed in January and February, as yields scaled marginally by 7 bps in March 2025. At the start of March, fixed-income yields, especially at the short end of the curve, moderated, reflecting the pattern witnessed in the prior months.
However, this yield deceleration was halted due to strained system liquidity and the re-adjustment of the NTB auction calendar. On the latter, contrary to the Debt Management Office’s initial plan to borrow N1.90 trillion (net repayment of N742.10 billion) in March, they ended up increasing targeted borrowings to N2.82 trillion (net borrowing of N179.73 billion) and raising the number of proposed auctions in the period.
“To our minds, the DMO needed to fully roll over maturing instruments and increase stop rates in a bid to retain FPI funds, whose excitement in Naira assets waned in the period due to global risk-off sentiments amid volatile oil prices”, the firm said.
Analysts said the unexpected change in the DMO’s issuance plan may have also signaled to the market that the government’s financing needs may be higher than anticipated following the recent upward revision of the FGN’s 2025 spending plans to N54.9 trillion from the initial N49.7 trillion. #Nigerian Bonds Yield Rises to 18.9% Ahead of Q2 Supply eTranzact International Declares N12.5k Final Dividend
