Nigeria’s bond market maintained its bullish momentum last week as investor appetite for government securities surged, driving average yields down to 18.38 per cent from 18.57 per cent the previous week. The strong performance highlights growing confidence in the country’s debt instruments, particularly as market liquidity improves and inflationary pressures show signs of easing. Analysts note that this trend reflects a selective yet sustained interest in longer-dated bonds.
Specific instruments led the rally, with yields on the JAN-35, MAR-27, and APR-32 bonds dropping sharply by 64, 39, and 36 basis points, respectively. This surge in demand for longer-term debt has been attributed to institutional investors positioning ahead of upcoming policy announcements. However, the market showed some mixed signals, as the APR-32 and JUN-33 bonds experienced selling pressure, resulting in yield increases of 36 and 13 basis points, respectively.
In the primary market, the Debt Management Office (DMO) offered N100 billion worth of FGN bonds during its June auction, a notable decline from the N300 billion offered in previous months. Despite the smaller offer, investor interest remained robust, with subscriptions totaling N602.86 billion. Only N99.99 billion was allotted, with the seven-year bond particularly oversubscribed, attracting over 93 per cent of total bids. The Central Bank of Nigeria (CBN) ultimately cleared the auction at stop rates of 17.75 per cent for APR-29 and 17.95 per cent for JUN-32 bonds, aligning closely with secondary market levels.
The secondary Treasury Bill market mirrored this optimism, with average yields falling 29 basis points to 20.23 per cent week-on-week. Short-term instruments such as APR-26 (-136 bps), MAY-26 (-97 bps), and JAN-26 (-86 bps) saw significant declines, reflecting strong investor demand. Yet, some profit-taking caused minor yield increases on the NOV-25 (+8 bps) and MAR-26 (+5 bps) bills, indicating selective adjustments by market participants.
International investors also drove gains in the Eurobond segment, with average yields declining to 8.61 per cent from 8.97 per cent the previous week. The SEP-33, FEB-32, and SEP-28 Eurobonds experienced notable yield compressions of 45, 44, and 39 basis points, respectively. Experts suggest this reflects a renewed appetite for emerging market assets as global risk aversion eases, highlighting Nigeria’s growing appeal to both domestic and foreign investors.
source: punch