The Nigerian bond market experienced increased selling activity as investors prepared for the government’s first bond auction of 2025, scheduled for Monday. This caused the average yield on government bonds to rise to 20.80%.
The Debt Management Office (DMO) announced it will offer ₦450 billion worth of bonds in the auction. This includes ₦100 billion in bonds maturing in April 2029, ₦150 billion in bonds maturing in February 2031, and ₦200 billion in new bonds maturing in January 2035.
Ahead of the auction, many investors sold off their existing bonds to adjust their portfolios, especially as inflation reduces the real value of returns. On Thursday, most sell-offs were concentrated on short-term bonds, causing their yields to rise by 0.20%, while long-term bonds saw a slight gain with yields dropping by 0.08%.
Despite the sell-offs, there is cautious optimism among investors as they prepare for Monday’s auction. Some activity was observed in mid-term bonds, particularly the February 2031 bonds, which attracted investor interest. This pushed their yields slightly lower, closing at 22.31%.
Additionally, bonds maturing in April 2029 also saw higher demand, with yields falling to 20.45%. However, bonds with longer maturities, like the April 2049 bonds, were more actively sold off by investors.
Overall, the average yield across the bond market dropped slightly by 0.09% to close at 20.80%, according to analysts at CardinalStone Securities.
