Nigeria’s government bonds experienced a downturn in the secondary market as investors held back ahead of next week’s bond auction by the Debt Management Office (DMO). Trading activity remained limited, with some interest seen in medium-term bonds.
Investors made offers on bonds maturing in April 2029, February 2031, and May 2033. However, actual trades were minimal due to the wide gap between buying and selling prices, according to AIICO Capital Limited. Notably, sell-offs affected the middle segment of the bond curve, with yields increasing for bonds maturing in June 2033 (+29 basis points) and February 2034 (+35 basis points).
Market sentiment remained bearish as fixed-income investors navigated tight liquidity conditions. This led to investors offloading their holdings across different maturity periods. Short and mid-term bonds, particularly the April 2029 (+10 basis points) and April 2037 (+7 basis points), experienced notable declines. Meanwhile, long-term bonds like the June 2053 were offered at a yield of 17.00%. Overall, the average bond yield inched up by 1 basis point, reaching 18.61%.
Next Monday, Nigeria’s debt office plans to issue N300 billion worth of Federal Government bonds in the primary market. This will be the final bond auction for the first quarter of 2025, as the government seeks to raise funds to bridge the budget deficit through domestic borrowing.
