The secondary market for Federal Government of Nigeria (FGN) bonds closed slightly negative, with the average yield inching up to 18.86% amid cautious sentiment ahead of the second quarter 2025 debt supply.
Activity remained muted as sell-side pressure dominated the short-to-mid segments, particularly on the APR 2029, FEB 2031, and MAY 2033 maturities. The long end also came under pressure, with the JUN 2053 bond yield spiking by 31 basis points.
Across the benchmark curve, yields expanded at the short (+1bp) and long (+4bps) ends, while the mid-segment closed flat. The upward shift at the short end was mainly driven by modest selloffs on the APR 2029 paper. Despite some movement in select bonds, overall market activity stayed subdued as investors treaded cautiously in anticipation of fresh policy signals and liquidity dynamics.
Analysts from TrustBanc Financial Group noted that traders are taking a defensive stance amid expectations of heavy borrowing in Q2, as government spending plans widen.
In a separate update, CardinalStone Limited observed that March marked a reversal from the yield decline seen in January and February, with average yields climbing 7bps across fixed-income instruments.
This reversal was driven by tighter system liquidity and adjustments to the Nigerian Treasury Bills (NTB) auction calendar. The Debt Management Office (DMO) increased its March borrowing to ₦2.82 trillion—significantly above the earlier plan of ₦1.90 trillion—signalling elevated financing needs. CardinalStone added that the hike in stop rates and borrowing volumes may have been intended to retain foreign portfolio inflows, which have softened amid global risk aversion and oil price volatility.
Analysts warn that the DMO’s more aggressive issuance stance, coupled with the upward revision of the federal government’s 2025 spending from ₦49.7 trillion to ₦54.9 trillion, suggests that fiscal pressures may weigh further on the fixed income market in the months ahead.
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