Nigeria’s Bonds Rally after Auction, Yield Slides to 16.73%
The Federal Government of Nigeria (FGN) bonds market traded bullish on Tuesday after the Debt Management Office (DMO) monthly auction on Monday.
Lost bids at the auction filtered into the secondary market, driving buying interest in the mid and long end of the curve amidst expectations of higher bond supply in Q1.
Fixed income market analysts said buying interests were notable on selected papers, adding that muted activities prevailed across all other tenors.
At the short end, mild buy pressure pushed the 20-Mar-27 maturity higher by 1bp to 17.84%.
At the belly of the curve, the 21-Feb-34 recorded the most notable yield compression, as yields fell by 12bps to settle at 17.52%, while most long-dated bonds closed with yields unchanged from the previous session’s close.
Overall, the sharp fall in yield in the 21-Feb-34 was enough to drive average benchmark yields lower by 1bp to 16.73%, signaling enhanced optimism and robust demand from domestic investors for naira-based fixed-income instruments.
AIICO Capital Limited said in the near term, it expects market activities to improve as investor sentiment trades in line with the Bond auction results. Yields at the belly of the curve closed within the range of 16.90% and 17.70%.
At the bond auction, the DMO offered ₦900.00 billion but allotted ₦1.54 trillion across the re-opening of the 18.50% FGN Feb 2031 (5-yr), 19.00% FGN Feb 2034 (8-yr), and 22.60% FGN Jan 2035 (9-yr) instruments.
Demand was tilted towards the longer-dated bonds. Stop rates eventually cleared at 17.62%, 17.50%, and 17.52%, respectively. #Nigeria’s Bonds Rally after Auction, Yield Slides to 16.73% Naira Touches N1,400 per Dollar in Nigerian Currency Market

