Nigeria’s Bond Market Extends Winning Streak as Yields Dip to 18.38%
Investors rush to government debt amid easing inflation outlook and strong market liquidity
Overview: Bullish Momentum Strengthens in the Bond Market
Nigeria’s bond market continued its rally last week, driven by strong investor demand for government securities. Average yields declined by 19 basis points, closing at 18.38%, compared to 18.57% the week before — signaling sustained confidence in sovereign debt instruments.
Market analysts attributed this positive sentiment to improved system liquidity and a slowdown in inflation expectations, both of which encouraged investors to lock in returns on long-term bonds.
Long-Term Bonds Lead the Rally
The biggest gains were recorded in select longer-dated instruments such as:
• JAN-2035 bond: Yield fell sharply by 64 basis points (bps)
• MAR-2027 bond: Down 39 bps
• APR-2032 bond: Down 36 bps
These yield compressions reflect renewed investor confidence and selective buying, especially from institutional investors seeking stability ahead of upcoming monetary policy guidance.
However, there were pockets of profit-taking in some segments — notably the APR-32 and JUN-33 bonds — where yields rose by 36 bps and 13 bps, respectively.
Primary Market Auction: Demand Surges Despite Lower Offer
In the primary market, the Debt Management Office (DMO) offered ₦100 billion worth of Federal Government Bonds — a sharp drop from the ₦300 billion offered in prior months.
Despite this reduced offer, investor interest remained exceptionally strong, with total subscriptions hitting ₦602.86 billion, more than six times the amount on offer. However, only ₦99.99 billion was allotted.
Notably, the seven-year bond was the star of the auction, accounting for 93.09% of total bids — showing where most investor confidence currently lies.
The Central Bank of Nigeria (CBN) cleared the auction at stop rates of:
• 17.75% for the APR-2029 maturity
• 17.95% for the JUN-2032 maturity
These rates closely mirrored those seen in the secondary market, confirming a consistent pricing trend.
Treasury Bills: Investors Favor Short-Term Instruments
The Treasury Bills (T-bills) segment also recorded a bullish performance, with average yields dropping by 29 bps week-on-week to 20.23%.
Strong buying interest drove sharp yield declines on:
• APR-26 bill: –136 bps
• MAY-26 bill: –97 bps
• JAN-26 bill: –86 bps
However, light profit-taking led to slight yield upticks on:
• NOV-25 bill: +8 bps
• MAR-26 bill: +5 bps
This pattern suggests investors are rotating positions — locking in profits on shorter tenors while maintaining exposure to attractive yields on mid-term papers.
Eurobond Market: Global Appetite for Nigerian Debt
Positive sentiment wasn’t limited to the local market. Nigeria’s Eurobond segment also witnessed a strong rally, with average yields dropping to 8.61% from 8.97% the previous week.
The most notable yield compressions were recorded in:
• SEP-33 Eurobond: –45 bps
• FEB-32 Eurobond: –44 bps
• SEP-28 Eurobond: –39 bps
Analysts attributed this to renewed foreign investor appetite for emerging market assets, as global risk aversion continues to ease.
Analyst Insight: Selective Optimism
Overall, market watchers say the bond rally reflects cautious optimism among investors. The selective positioning seen in specific maturities points to a strategy driven by expectations of moderating inflation, stable policy signals, and steady liquidity conditions.
If these trends persist, analysts expect further yield moderation in coming weeks — though profit-taking may cause short-term fluctuations.
⚙️ Key Takeaways
• Bond yields dropped to 18.38%, showing strong investor interest.
• DMO auction saw ₦602.86bn in subscriptions despite ₦100bn offer.
• T-bills and Eurobonds also recorded yield declines.
• Market sentiment remains cautiously bullish amid easing inflation outlook.
Investors rush to government debt amid easing inflation outlook and strong market liquidity
Overview: Bullish Momentum Strengthens in the Bond Market
Nigeria’s bond market continued its rally last week, driven by strong investor demand for government securities. Average yields declined by 19 basis points, closing at 18.38%, compared to 18.57% the week before — signaling sustained confidence in sovereign debt instruments.
Market analysts attributed this positive sentiment to improved system liquidity and a slowdown in inflation expectations, both of which encouraged investors to lock in returns on long-term bonds.
Long-Term Bonds Lead the Rally
The biggest gains were recorded in select longer-dated instruments such as:
• JAN-2035 bond: Yield fell sharply by 64 basis points (bps)
• MAR-2027 bond: Down 39 bps
• APR-2032 bond: Down 36 bps
These yield compressions reflect renewed investor confidence and selective buying, especially from institutional investors seeking stability ahead of upcoming monetary policy guidance.
However, there were pockets of profit-taking in some segments — notably the APR-32 and JUN-33 bonds — where yields rose by 36 bps and 13 bps, respectively.
Primary Market Auction: Demand Surges Despite Lower Offer
In the primary market, the Debt Management Office (DMO) offered ₦100 billion worth of Federal Government Bonds — a sharp drop from the ₦300 billion offered in prior months.
Despite this reduced offer, investor interest remained exceptionally strong, with total subscriptions hitting ₦602.86 billion, more than six times the amount on offer. However, only ₦99.99 billion was allotted.
Notably, the seven-year bond was the star of the auction, accounting for 93.09% of total bids — showing where most investor confidence currently lies.
The Central Bank of Nigeria (CBN) cleared the auction at stop rates of:
• 17.75% for the APR-2029 maturity
• 17.95% for the JUN-2032 maturity
These rates closely mirrored those seen in the secondary market, confirming a consistent pricing trend.
Treasury Bills: Investors Favor Short-Term Instruments
The Treasury Bills (T-bills) segment also recorded a bullish performance, with average yields dropping by 29 bps week-on-week to 20.23%.
Strong buying interest drove sharp yield declines on:
• APR-26 bill: –136 bps
• MAY-26 bill: –97 bps
• JAN-26 bill: –86 bps
However, light profit-taking led to slight yield upticks on:
• NOV-25 bill: +8 bps
• MAR-26 bill: +5 bps
This pattern suggests investors are rotating positions — locking in profits on shorter tenors while maintaining exposure to attractive yields on mid-term papers.
Eurobond Market: Global Appetite for Nigerian Debt
Positive sentiment wasn’t limited to the local market. Nigeria’s Eurobond segment also witnessed a strong rally, with average yields dropping to 8.61% from 8.97% the previous week.
The most notable yield compressions were recorded in:
• SEP-33 Eurobond: –45 bps
• FEB-32 Eurobond: –44 bps
• SEP-28 Eurobond: –39 bps
Analysts attributed this to renewed foreign investor appetite for emerging market assets, as global risk aversion continues to ease.
Analyst Insight: Selective Optimism
Overall, market watchers say the bond rally reflects cautious optimism among investors. The selective positioning seen in specific maturities points to a strategy driven by expectations of moderating inflation, stable policy signals, and steady liquidity conditions.
If these trends persist, analysts expect further yield moderation in coming weeks — though profit-taking may cause short-term fluctuations.
⚙️ Key Takeaways
• Bond yields dropped to 18.38%, showing strong investor interest.
• DMO auction saw ₦602.86bn in subscriptions despite ₦100bn offer.
• T-bills and Eurobonds also recorded yield declines.
• Market sentiment remains cautiously bullish amid easing inflation outlook.