Nigerian Bonds Yields Steady as DMO Opens N350bn Offer
The Nigerian bonds traded quietly on the secondary market before the Debt Management Office (DMO) opened its April auction for subscription on Monday. Traders said in separate updates that the Nigerian government bonds market traded quietly throughout last week, with steady but cautious interest in mid-curve papers.
Investors showed interest in FGN bonds maturing in 2031 and 2034. Ahead of the auction, market participants largely adopted a wait-and-see approach with cautious optimism given the mixed spot rate outlook.
The Central Bank of Nigeria cut spot rates on Nigerian Treasury bills on Wednesday but hiked the discount rate at the OMO bills auction on Friday by more than 3% across two tenors.
The signal kept trading activities in the bond market subdued, as investors continued to weigh Nigeria’s disinflation, which has reduced real return on investment in the debt market.
Some cherry-picking was observed in select tenors, especially in June 2053 and other mid-duration papers, but overall market flow remained light, AIICO Capital Limited noted in a market report.
Fixed income analysts highlighted that despite the muted trading sentiment, yields trended lower, reflecting modest buying interest. As a result, the average yield expanded by 1 bp to 19.0%. Across the benchmark curve, the average yield increased at the short (+2 bps) end.
The yield expansion was driven by selloffs of the JAN-2026 (+13bps) bond, while it declined at the mid (-3 bps) segment following demand for the FEB-2031 (-14 bps) bond. The average yield closed flat at the long end.
“We believe the outcome of this month’s FGN bond auction on Monday will shape the direction of yields in the secondary market,” fixed income market analysts at Cordros Capital Limited said. At the auction, the DMO is set to offer instruments worth N350.00 billion through re-openings of the APR-2029 and MAY-2033 bonds.
Over the medium term, analysts said they expect a moderation in bond yields, influenced by two factors: the anticipated dovish monetary policy stance and sustained improvement in demand and supply fundamentals in Q2 2025. #Nigerian Bonds Yields Steady as DMO Opens N350bn Offer BUA Cement Bolsters Earnings; Profit Rises by 351% in Q1
