Nigeria’s bond market recorded a bullish performance last week as yields on federal government securities fell by 10 basis points to 15.86%, reflecting renewed investor confidence and sustained demand for naira-denominated assets.
The decline, observed across short-, mid-, and long-tenured instruments, came amid expectations of a potential interest rate cut by the Central Bank of Nigeria (CBN) during its November policy meeting.
Afrinvest Securities reported that short-term maturities dropped by 8 basis points, medium-term by 15, and long-term by 7, with overall yields averaging 15.86% by week’s end.
Analysts attribute the performance to strategic portfolio adjustments by institutional investors positioning ahead of the Debt Management Office (DMO) auction scheduled for this week.
Investor Sentiment Remains Strong
Market activity was notably robust, as investors shifted focus from riskier assets to government bonds in response to lingering macroeconomic uncertainty.
The DMO is set to reopen two key issues — FGN AUG 2030 and FGN JUN 2032 — with offer sizes expected around ₦130 billion each. Analysts forecast that the results from today’s auction will influence secondary market pricing through the week.
Broadstreet expectations suggest that discount rates across fixed-income assets will continue to decline if inflation maintains its downward trajectory and the CBN proceeds with a policy rate cut.
Financial experts believe that the ongoing rally highlights renewed investor confidence in Nigeria’s debt instruments, with yields still offering attractive real returns relative to inflation.
