Nigeria’s fixed-income market experienced a surge in investor activity last week as appetite for Federal Government of Nigeria (FGN) bonds intensified, leading to a notable decline in benchmark yields.
Analysts observed that investors, seeking stability amid heightened volatility in both local and global equities, redirected capital toward longer-tenured government debt instruments.
Trading in the secondary market reflected a bullish tone as yields compressed by approximately 12 basis points week-on-week, closing at an average of 15.77%, according to Cowry Asset Limited.
Market participants pointed to increasing demand for mid-to-long-term bonds following signals from recent treasury bills auctions, suggesting potential repricing ahead of the November FGN bonds sale.
Investment firms reported that bonds maturing in 2027, 2028, and 2029 saw yields drop to between 15.42% and 15.83%, while those expiring in 2032, 2033, and 2034 traded around 15.70%, 15.68%, and 15.4%, respectively, AIICO Capital Limited noted.
Although activity at the long end — including the 2035, 2042, 2045, 2050, and 2053 maturities — remained subdued, market analysts said the trend signals a growing preference for duration exposure.
They attributed the rally to expectations of yield stability, capital gains, and sustained system liquidity supported by the Central Bank of Nigeria.
“Given strong participation from institutional investors, particularly pension funds and asset managers, we expect the bullish momentum in the bond market to persist,” analysts explained.
They added that investors are positioning strategically ahead of the upcoming primary auction, capitalizing on attractive yields and expectations of moderating inflationary pressures.
