Yields on Nigerian government bonds neared the 19% threshold last week as heightened investor caution ahead of inflation data and upcoming supply spurred widespread selloffs in the secondary market.
According to market analysts, the average mid-yield rose by 38 basis points week-on-week to close at 18.86%, reflecting a bearish sentiment that dominated trading activities. The short end of the yield curve gained 19bps, while the mid-segment inched up by 3bps, Cordros Capital reported.
The bearish turn in the market was largely driven by foreign portfolio investors (FPIs), who trimmed their holdings amid rising global uncertainty and weak oil prices. Traders noted that selling pressure was most pronounced at the mid-tenor of the curve, especially on bonds maturing in 2029, 2033, and 2035.
While system liquidity remained strong, overall sentiment was cautious as investors awaited the release of Nigeria’s rebased Consumer Price Index, expected to provide fresh signals on inflation trajectory. Trading activity was largely muted, with limited interest observed in instruments such as the Feb 2031, May 2033, and Jun 2053 bonds. Mid-week sessions saw marginal demand for Mar 2027 and Jan 2035 papers, though volumes remained thin.
Notably, sharp selloffs were recorded on JAN-2026 and FEB-2031 bonds, with yields expanding by 45bps and 64bps respectively. The long end of the curve, however, remained relatively flat.
Traders attributed the sustained risk-off sentiment to concerns over global trade tensions—particularly the impact of former U.S. President Trump’s tariff stance—and Nigeria’s lingering debt sustainability worries.
Despite some opportunistic buying at the belly of the curve, TrustBanc Financial Group noted that market activity is expected to remain subdued in the near term as participants await the Q2 2025 bond auction calendar.
