The Federal Government of Nigeria (FGN) bond market remained relatively muted on Thursday, with benchmark yields posting a marginal uptick to close at 19.48%. Thin trading activity and cautious investor sentiment kept the secondary market subdued.
According to traders, yield movement across major maturities was minimal, with average rates inching up by just a basis point. The restrained action was largely driven by limited supply from the Debt Management Office (DMO) and investor anticipation of softer spot rates in the near term.
As a result, many fixed-income investors chose to maintain their positions, favoring a hold strategy in response to the tightened bond supply and macroeconomic uncertainties.
Activity levels were modest, with traders noting conservative buying and selling behavior aimed at optimizing yields on naira-denominated assets. Investors focused primarily on short- to mid-tenor instruments, especially as long-dated papers remained less attractive.
Yield repricing was notable in bonds maturing in 2029, 2031, and 2032, which advanced to 15.90%, 16.85%, and 16.30%, respectively. However, the FGN 2033 bond defied this pattern, climbing 10 basis points to settle at 16.65%.
Wealth and asset managers who had already secured favorable yields chose to hold their positions, especially given the tight issuance environment and limited new supply from the DMO.
Despite the low-key nature of Thursday’s session, analysts observed some bearish momentum in the wake of the treasury bills auction held on Wednesday. The secondary market has shown signs of weariness, with market players awaiting more significant macroeconomic signals before repositioning.
Across the yield curve, average returns expanded at the short end by 5 basis points, driven primarily by selloffs in the March 2037 bond, which saw its yield rise by 33 basis points. Yields in the mid and long segments remained flat, as trading volume in those tenors remained light.
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