Nigeria’s sovereign bond market closed on a softer note as cautious investor sentiment triggered renewed selling pressure, lifting the benchmark yield to 16.31%.
Data from the secondary market showed the average yield on Federal Government of Nigeria (FGN) bonds edged higher by two basis points, reflecting a broad-based decline in prices as investors repositioned away from risk.
Trading conditions on Tuesday leaned mildly bearish, with activity skewed toward sell-side interest, particularly across the mid-to-long end of the yield curve. This outweighed relatively subdued flows across most short-dated maturities, according to market intelligence from AIICO Capital.
At the short end of the curve, yield movements were largely muted. The 20 March 2027 FGN bond recorded a slight one basis point yield compression, while other nearby tenors closed unchanged, indicating limited pressure on short-duration instruments.
Market activity weakened further at the belly of the curve, where demand remained thin. Yields on the 21 February 2031 and 27 April 2032 bonds expanded by three basis points and eleven basis points, respectively, as sellers dominated trading in those maturities.
Sentiment deteriorated more sharply at the long end, where aggressive sell-offs pushed yields higher on longer-dated instruments. The 15 May 2033 and 18 July 2034 bonds saw yield expansions of 18 basis points and 19 basis points, respectively. In contrast, the 21 February 2034 bond moved against the broader trend, posting a 14 basis point yield compression as selective demand emerged.
Other long-dated securities closed flat, suggesting investors remained cautious rather than fully exiting positions, AIICO Capital noted.
Overall, pressure across the mid-to-long segment was sufficient to lift the market-wide benchmark yield by two basis points to 16.31%. Analysts observed that yields around the belly of the curve settled within a range of 16.40% to 17.50% at the close of trading.
Looking ahead, market participants expect short-term yield movements to be shaped by system liquidity conditions, as well as evolving demand and supply dynamics within the domestic fixed income market.
