By Boluwatife Oshadiya | March 2, 2026
KEY POINTS
- Average FGN bond yield declines by 48 basis points to 15.54%
- February auction records ₦2.7tn in bids against ₦800bn offer
- Analysts project stable to slightly bullish secondary market outlook
MAIN STORY
Average yield on Federal Government of Nigeria (FGN) bonds has declined to 15.54 percent in the secondary market as investor appetite for naira-denominated assets strengthens.
The 48-basis-point drop follows robust demand at the February 2026 bond auction conducted by the Debt Management Office (DMO), where ₦800 billion was offered across the February 2032, May 2033, and February 2034 maturities. Total subscriptions reached ₦2.7 trillion, though final allotment was trimmed to ₦524 billion.
Stop rates for the February 2032 and May 2033 bonds closed at 15.74 percent, while the February 2034 maturity settled at 15.50 percent.
Market analysts attribute the yield compression to aggressive investor positioning after authorities under-allocated at auction, effectively tightening supply despite strong subscription levels. The move reinforced confidence in Nigeria’s local debt market, particularly as yields continue to outpace inflation.
Robust secondary market trading has further supported price appreciation, with investors seeking real returns amid persistent macroeconomic uncertainty.
WHAT’S BEING SAID
“We anticipate that the Nigerian secondary bond market will maintain a stable to slightly bullish trajectory in the near term, bolstered by persistent local investor interest and ongoing demand for fixed-income securities,” Cowry Asset stated in a market note.
Market participants say the strong oversubscription at auction underscores sustained confidence in government securities, particularly longer-duration instruments amid expectations of potential monetary easing.
WHAT’S NEXT
- Next FGN bond auction cycle expected in March 2026
- Investors watching upcoming Monetary Policy Committee signals
- Secondary market liquidity likely to remain elevated in the near term
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