Bond Yields Dip as Demand Surges in Nigeria’s Secondary Market
Yields on Federal Government of Nigeria (FGN) bonds declined in the secondary market as investors sought to recover lost opportunities from a highly competitive primary auction conducted earlier in the week.
The trend reflects a growing appetite for government securities amid limited supply.
The Debt Management Office’s (DMO) quarterly issuance guidance signalled a lower volume of bond offerings, prompting increased activity in the secondary market. Many investors, unable to secure allotments during the primary sale, turned to the secondary market to fill their portfolios.
According to CardinalStone Securities, bond yields have dropped roughly 30 basis points below the primary auction closing rates, despite some investor hesitation due to unattractive coupons. Analysts noted that mid-tenor bonds saw yields decline by about 12 basis points, realigning with recent auction rates.
A total of ₦100 billion was allotted on the 2029 and 2032 bonds at stop rates of 17.90% and 17.95%, respectively. This triggered a broader drop in yields, with average rates falling by 15–20 basis points across most maturities.
AIICO Capital Limited reported that while tight liquidity remains a concern, market sentiment is gradually tilting toward a bullish stance. Investors continue to see value in naira-denominated assets amid reduced bond supply, helping to lift demand and push down yields.
