Nigeria’s sovereign bond market recorded a notable decline in average yields, with rates dipping to 18.64% in the secondary market ahead of a new debt issuance from the Debt Management Office (DMO).
According to financial market sources, the DMO is set to raise ₦100 billion through a mix of reopened and freshly issued bonds at a scheduled primary market auction (PMA) on Monday.
Last week’s bond market activity closed on a positive trajectory, buoyed by a combination of improved investor sentiment, upgraded sovereign credit outlooks, and steady demand across multiple tenors, Cowry Asset Management noted in a market commentary.
Early in the week, bond trading was relatively tepid as attention shifted towards the Open Market Operations (OMO) auction. The limited participation in the secondary market was attributed to wide bid-ask spreads, which constrained trading flows.
By midweek, market activity improved moderately, with heightened interest seen in longer-dated bonds including the April 2029, February 2031, May 2033, March 2035, and June 2053 issues. As the week progressed, investor demand picked up, supported by selective buy-side interest after a round of early profit-taking.
Notably, bulk trading volumes were observed in the February 2031, May 2033, February 2034, and March 2050 papers. Market insiders highlighted a mildly bullish sentiment, particularly concentrated on specific maturities.
Yields fell significantly on some key instruments. The JAN 2035, JUN 2038, and MAR 2026 bonds witnessed drops of 57 basis points, 57 basis points, and 60 basis points respectively—signalling strong market demand.
Consequently, the average yield across the FGN bond curve dropped by 25 basis points on a weekly basis to 17.83%, reflecting rising domestic appetite for federal debt instruments.
Looking ahead, analysts project sustained bullishness in both the local and international bond markets, supported by positive investor sentiment and enhanced fiscal stability.
For the upcoming auction, the DMO will reopen the April 2029 five-year bond and issue a new seven-year bond maturing in June 2032, offering ₦50 billion for each tranche. Analysts expect a strong turnout, with the government leveraging local debt to finance its 2025 fiscal obligations.
