As demand slows, the average yield on Nigerian government bonds remains stable in the secondary market. Fixed-income market analysts note that investors are trading cautiously ahead of the Central Bank’s midweek auction. Despite the overall stability, some activity is observed in the mid-segment (-5bps) of the curve, particularly in the Jan-35 (-26bps), Feb-31 (-8bps), and Jul-30 (-6bps) bonds.
On Monday, the average benchmark yield holds at 18.4%, even as expectations for a sharp yield repricing persist. In the secondary market, mild buying interest in the 2031 FGN bond is counterbalanced by moderate sell-offs, with profit-taking dominating the short and mid ends of the curve.
Bonds maturing in 2029 and 2034 close with yields of 18.98% and 18.20%, respectively, according to traders’ market updates. Across the benchmark curve, yields edge down slightly in the short (-1 bp) and mid (-2 bp) segments, while the long end remains unchanged. Erad Partners Limited highlights that February 2024 sees a strong rebound in Nigeria’s fixed-income market, marked by a sharp decline in yields and increased investor confidence.
The market records a month-on-month yield drop of approximately 400 basis points, driven by strong investor sentiment from both domestic and international players. Analysts attribute the bullish trend to several factors, the most significant being the easing of inflation.
After peaking at 34.8%, the headline inflation rate declines to 24.48% in February. This improvement boosts investor confidence and raises expectations of a potential shift toward looser monetary policy in the medium term.
