Nigeria’s bond market experienced a slight uptick in yields last week, with the benchmark yield rising by 5 basis points (bps) in the secondary market.
This development comes as investors adjusted their holdings in anticipation of the Debt Management Office’s (DMO) final primary market auction, scheduled for today.
The DMO plans to reopen 5-year and 7-year local bonds to investors, offering ₦60 billion each. Despite the interest rate adjustment, bond pricing has struggled due to tight spot rate movement in main auctions this year. Bond yields have remained subdued compared to Treasury and OMO bills.
Market analysts expect demand to remain strong due to declining supply ahead of massive borrowing expectations via the debt market in 2025. Last week, trades on bonds focused on the mid-segment of the yield curve, with notable jumps in yields on the Jun-33 and Feb-34 papers.
The bond market is anticipated to start the new week calmly, shifting the focus to the FGN bonds auction. In its note, Cordros Capital Limited stated that the average yield expanded at the short, mid, and long segments, driven by sell pressures on specific bonds.
