Nigeria’s 10-year bonds have attracted strong investor interest in the secondary market following an update from the Debt Management Office (DMO). Investors are rushing to secure long-term naira assets to maximize returns amid potential shifts in economic policy.
In its latest bond offer circular, the DMO announced that the January 2035 bond would not be included in the upcoming auction. This move, combined with a significant drop in inflation and a high-interest rate benchmark at 27.50%, has boosted confidence among local investors.
To attract foreign investments, the Nigerian government has maintained high yields on Treasury bills and bonds. As a result, investors continue to flock to government securities, with subscription levels surpassing ₦2.41 trillion at the Treasury bill auction and ₦1.632 trillion at the bond auction, despite liquidity challenges in the banking sector.
On Monday, trading activity in the local bond market was relatively low as investors focused on the FGN bond auction. The DMO offered ₦350 billion in bonds, split between the April 2029 bond (₦200 billion) and the February 2031 bond (₦150 billion). Despite subdued activity, there was moderate buying interest in mid-term bonds.
Investors showed strong demand for the January 2035 bond, but available offers were scarce. Mixed interest was noted in the February 2031 and June 2053 bonds, with trading activity concentrated at the long end of the yield curve. Consequently, the average yield increased by 3 basis points to 19.51%.
