Nigeria’s sovereign bond market closed on a bullish note on Tuesday, following the Federal Government’s latest bond auction conducted by the Debt Management Office (DMO) a day earlier.
Unsuccessful bids from the auction spilled into the secondary market, fueling renewed buying interest—particularly in mid- and long-dated instruments—amid expectations of increased bond issuance in the first quarter of the year.
Fixed income analysts noted selective demand across the curve, with stronger activity concentrated on specific benchmark securities, while trading remained relatively muted on other maturities.
At the short end of the curve, mild buying pressure lifted the 20-Mar-27 bond, pushing its yield down by 1 basis point to 17.84%.
More pronounced movements were observed at the belly of the curve, where the 21-Feb-34 bond recorded the sharpest yield compression. Its yield declined by 12 basis points to close at 17.52%, while yields on most long-tenor bonds ended the session unchanged.
The significant yield drop on the 21-Feb-34 instrument was sufficient to drag average benchmark yields lower by 1 basis point to 16.73%. Market participants view this as a signal of improving sentiment and sustained domestic appetite for naira-denominated fixed-income assets.
AIICO Capital Limited said it expects trading activity to pick up in the near term as investor sentiment continues to track outcomes from the bond auction. According to the firm, yields at the belly of the curve closed within the 16.90% to 17.70% range.
At the auction, the DMO initially offered ₦900 billion but ended up allotting ₦1.54 trillion across the re-openings of the 18.50% FGN Feb 2031, 19.00% FGN Feb 2034, and 22.60% FGN Jan 2035 bonds.
Investor demand was heavily skewed toward longer-dated instruments, with stop rates clearing at 17.62%, 17.50%, and 17.52%, respectively.
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