Nigeria’s sovereign bond market staged a strong rally in the secondary segment as investors moved early to capture opportunities ahead of the Debt Management Office’s (DMO) reopening of 5-year and 7-year papers scheduled for Monday.
The DMO is expected to conduct today’s auction with N460 billion in reopened bonds split across the two benchmark tenors. Market participants anticipate shifts in rates as policymakers at the Central Bank prepare for another monetary policy review this week.
Last week, benchmark yields across Federal Government of Nigeria (FGN) bonds dipped by 9 basis points to 15.5%, following renewed appetite for naira assets in the wake of October’s disinflation. The improved liquidity environment pushed the market to a bullish stance, with demand spreading across several points on the yield curve.
Trading activity remained strong throughout the week, as investors rotated into fixed-income assets amid uncertainties in alternative markets. Analysts at Cowry Asset Limited reported that a significant portion of liquidity shifted to the belly of the curve, especially around 2029, 2031, and 2032 maturities, which attracted the most flows.
Despite a mild slowdown in trade volumes on Friday, selective bids continued to emerge on the 2032 and 2033 papers, ensuring steady participation through the weekend.
Cowry Asset noted that market sentiment strengthened sharply at the beginning of the week, aided by the latest inflation print showing further easing to 16.05% from 18.02% the previous month. This development reinforced interest in longer-dated securities and compressed yields toward the mid-15% band.
Midweek, however, some of the momentum tapered on selective profit-taking, particularly on the 2032 and 2033 papers, while moderate two-way trading appeared on the long-dated 2053 bond. Nonetheless, persistent appetite for government securities helped push overall yields 9 basis points lower to an average of 15.48%.
The upcoming auction under the Q4 issuance calendar is expected to test demand once more, with the DMO preparing to offer N460 billion—substantially more than the N260 billion issued in October. The DMO plans to reopen the 2030 and 2032 bonds, with each receiving an allocation target of N230 billion.
With inflation continuing its downward trajectory, analysts anticipate that the secondary market will remain moderately bullish in the near term. Yields may continue to trend lower, especially within the mid-curve space where liquidity is deepest and investor positioning is most robust.
 reopening of 5-year and 7-year papers scheduled for Monday.){kind=link}