Yield on Nigerian Bonds Drops as Investors Boost Holdings
The benchmark yield on Nigerian bonds declined as due to buying momentum in the secondary market where investors remained focused on the short-to-mid tenors.
A number of investors who lost their bids at the primary market auction are now battle-ready to boost their portfolio holdings via secondary market purchases. This will drive yield down, according to analysts.
Investors interest in local borrowing papers picked up significantly on the back inflation cover on naira assets investment. Nigeria’s benchmark interest rate, which recently surpassed inflation, ended negative interest yield investors have been earning in the last four years.
“Over a four-year period, the Nigerian government T-bill and bond yield curve has changed from an upward slope to a downward one,” Coronation Research said in a report.
As market interest rates have risen across all durations over the past four years, including 2024, mark-to-market prices of FGN bonds have fallen.
Prices of the longest-dated bonds have been most susceptible, according to Coronation Research. In 2025, a slew of analysts expect Nigerian bonds yields to decline as investors continue to lock in profit in the asset.
On Wednesday, aggressive bids filtered into the market, particularly at the short end (-53bps) of the curve where investors accumulated units of the FEB-28 (-117bps), APR-29 (-59bps), and MAY-29 (-57bps) papers.
This demand further pushed yields down on key bonds, including the April 2029s, February 2031s, May 2033s, February 2034s, and January 2035s.
Traders said among the notable movements was the 2031 bond, which declined by 10 bps to close at 18.40%, reflecting sustained demand. Due to the sustained rally, the average benchmark yield declined by 22 basis points to print at 18.86%. #Yield on Nigerian Bonds Drops as Investors Boost Holdings
