Nigeria’s secondary fixed income market maintained its upward trajectory during the week under review, underpinned by sustained investor appetite for naira-denominated securities and notable movements across the yield curve.
Activity in the Treasury bills secondary market ended the week firmly in positive territory, with average yields compressing by 60 basis points to settle at 17.62%, compared with 18.22% recorded in the prior week, according to a market update released by Meristem Securities Limited.
Market participants reported that demand was broad-based across most maturities, with pronounced buying interest observed in longer-dated instruments. Notable yield contractions were recorded on the OCT-26 (-149bps), NOV-26 (-165bps), and DEC-26 (+171bps) Treasury bills, reflecting strong positioning by investors seeking duration amid easing rate expectations.
At the primary market level, the Central Bank of Nigeria (CBN) conducted its first Treasury bills auction for February, offering a total of ₦1.15 trillion across the standard tenors. Investor participation remained robust, with total subscriptions rising to ₦4.59 trillion—representing a 33.41% increase from the preceding auction.
This resulted in a subscription-to-offer ratio of 3.99x, highlighting the continued strength of demand for sovereign short-term instruments. Analysts attributed the elevated bids largely to the 364-day paper, which accounted for 84.90% of total subscriptions during the auction.
Despite strong demand, total allotment declined by 10.17% to ₦952.61 billion, while the bid-to-cover ratio moderated to 0.82x from 0.92x previously. Stop rates on the 91-day and 182-day Treasury bills were left unchanged at 15.84% and 16.65%, respectively. However, the stop rate on the 364-day instrument declined sharply by 137 basis points to 16.99%.
According to market analysts, the Nigerian Treasury bill maturing in February 2026 was the only instrument to record a marginal yield increase during the week, rising by 0.96 basis points amid selective profit-taking.
Commenting on the auction outcome, analysts noted that the reduction in long-end rates was driven by a concentration of bids at the lower end of the yield range, which provided room for downward repricing. They added that the softer yield environment could translate into reduced borrowing costs for the Federal Government over time.
In the bond segment, the secondary market also recorded a bullish performance, with average yields easing by 31 basis points to 16.17%, compared with 16.48% in the previous week.
Buying activity was largely focused on the short- to mid-tenor segment of the curve, particularly the MAR-2026 (-88bps), APR-2031 (-125bps), and MAY-2033 (-107bps) bonds. Meanwhile, trading at the long end remained subdued, with yields on longer-dated instruments closing largely unchanged.
Meanwhile, the Eurobond market ended the week on a flat note, as average yields remained stable at 7.07%. Investor sentiment was mixed across the curve, with modest gains recorded on select bonds, including the Nov-27 (-6bps), Feb-32 (-3bps), and Sep-33 (-2bps) issues.
Conversely, mild sell-offs were seen in other papers, notably the Sep-28 (+2bps), Feb-30 (+3bps), and Feb-38 (+3bps) Eurobonds. Analysts said the mixed performance reflects lingering investor caution amid ongoing geopolitical uncertainties in global markets.
