Nigerian Bond Market Stays Flat as Investors Hold Positions at 16.97% Yield

The Nigerian bond market closed quietly on Tuesday as investors maintained a cautious stance, leaving the average yield unchanged at 16.97%. Despite expectations of fresh triggers to drive activity, trading remained soft in the secondary market, with investors largely holding their positions. Analysts noted that profit-taking and economic uncertainty kept sentiment subdued.

Credit Rating Services reported that market activity was thin, reflecting investors’ reluctance to make big moves. At the short end of the benchmark curve, yields ticked up slightly, with the March 2027 FGN bond adding two basis points. In contrast, the mid-segment showed a mild contraction, driven by selloffs on the February 2034 paper, while yields on longer-dated bonds held steady.

Interestingly, demand improved for medium-term securities, with notable buying in bonds maturing in 2031 and 2033. This activity pushed their yields down by 25 and 40 basis points respectively, signaling selective investor confidence in mid-tenor instruments. Still, overall volumes were described as thin, pointing to investors’ wait-and-see approach.

Meanwhile, the Treasury bills market ended the session on a bearish note, with the average yield rising by eight basis points to 18.72%. The bulk of demand was concentrated in longer-dated papers, particularly the newly issued one-year Treasury bill, which was the most actively traded instrument. Analysts suggested that investors were seeking better returns amid rising uncertainty.

Overall, the week’s trading highlighted a cautious but strategic mood in Nigeria’s fixed-income market. While FGN bonds traded flat on average, selective buying in mid-tenors and heightened activity in Treasury bills reflected investors’ search for opportunities in an unpredictable economic climate. Market watchers expect fresh economic signals and government policy directions to dictate the next major shift in yields.

source: vanguard