Yields on Federal Government of Nigeria (FGN) bonds remained below the 16% threshold in the secondary market, reflecting investors’ restrained appetite amid mixed signals in the fixed-income landscape.
The bond market has been treading cautiously following the recent interest rate cut by monetary authorities, which has encouraged some investors to shift towards riskier assets. Despite sufficient liquidity across the financial system, bargain hunting has stayed muted, underscoring a conservative stance among traders dealing in sovereign debt instruments.
Analysts say the flexibility granted to pension fund administrators in portfolio management could potentially redirect focus away from low-yield bonds, affecting trading dynamics in the medium term.
With inflation data expected later this week, activity within the federal government bond space remained subdued. The short end of the curve dipped slightly by one basis point (-1bp), while the overall average yield across the curve held steady at 15.98%.
Conversely, the Treasury bills market displayed mild bullish sentiment, particularly across the short (-2bps) and mid (-2bps) segments, pulling the average yield down marginally by one basis point to 17.39%.
Across benchmark bonds, yields expanded slightly at the mid segment (+1bp) due to profit-taking on the JUL-2034 instrument but remained flat at both the short and long ends of the curve.
Fixed-income investors continue to show measured optimism toward naira-denominated assets, concentrating on short- and mid-tenor maturities. The Debt Management Office (DMO) has published its Q4 2025 bond issuance calendar, featuring reopenings of the AUG 2030 and JAN 2032 papers.
For now, the average benchmark yield remains stable at 15.98%. Market analysts anticipate that investor sentiment will likely stay cautious in the near term as inflation and interest rate expectations continue to shape trading strategies.
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