Investors offloaded Nigerian government bonds ahead of the Treasury Bills auction scheduled for Wednesday, causing bond yields to rise. The average yield on Federal Government of Nigeria (FGN) Bonds increased by 12 basis points (bps), closing at 18.59%.
This increase was driven by investors adjusting their fixed-income portfolios amid changing market conditions. A slowdown in inflation and high-interest rates influenced market sentiment, leading to lower trading activity and wider bid/ask spreads in the bond market.
The sell-off was particularly noticeable in mid-to-long-term bonds, as fewer buyers were willing to take up the excess supply. Trades were mainly focused on the February 2031 and May 2033 bonds. A significant sell-down also occurred in the March 2025 bond, pushing its yield up by 348 basis points to 20.73%.
Analysts predict that investors will remain cautious as they wait for the outcome of the Treasury Bills auction. The results of this auction may provide clues about how next Monday’s FGN bond auction will play out.
