Nigeria’s Bond Yield Falls on Growing Investors’ Confidence
The average yield on Federal Government of Nigeria (FGN) bond dipped to 15.4% in the secondary market, as investors actively seek real returns in the naira curve.
The local debt market continues to present an attractive opportunity, with yields consistently surpassing inflation as higher interest rates chase the consumer price index.
Investors are increasingly chasing the naira asset, with a significant surge in demand following the authorities’ under-allocation at the monthly bond auction, despite a remarkable surge in subscriptions.
This decision has effectively tightened supply, contradicting earlier expectations. Robust trading activity highlights a clear, sustained confidence from investors and an escalating appetite for local fixed-income instruments, even amid existing market uncertainties.
Consequently, yields have eased, with the average yield dropping by 48 basis points to 15.54%, a clear indicator of strong demand for government securities.
In the recent February 2026 FGN bond auction conducted by the Debt Management Office (DMO), ₦800 billion was offered across the Feb 2032, May 2033, and Feb 2034 maturities.
The auction witnessed overwhelming interest, attracting ₦2.7 trillion in bids, though the final allotment was a more conservative ₦524 billion. Stop rates for the Feb 2032 and May 2033 bonds closed at 15.74%, while the Feb 2034 bond slightly edged lower at 15.50%.
This reflects robust demand for longer-duration bonds amid expectations of easing monetary policies.
“We anticipate that the Nigerian secondary bond market will maintain a stable to slightly bullish trajectory in the near term, bolstered by persistent local investor interest and an ongoing demand for fixed-income securities in the face of economic uncertainties”, Cowry Asset asserts in a note.
The buying sentiment underlines the resilience and attractiveness of Nigeria’s bond market. OMO Bill Yield Increases as Investors Trim Holdings
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