Nigeria’s secondary bond market ended the week on a noticeably weaker footing as average yields climbed to 15.61 per cent, reflecting renewed investor caution and sustained selling pressure across the fixed-income market.
The rise in yields followed broad repositioning by traders who continued to adjust to persistent macroeconomic uncertainties.
Market activity remained muted through the week, underscoring limited appetite for naira-denominated bonds.
Even though trading was concentrated around the 2034, 2037 and 2038 maturities, which recorded the highest transactions, the pockets of demand were not enough to counter the general upward movement in yields.
Investors continued to demand wider risk premiums due to inflation concerns, cautious liquidity conditions and expectations of tighter monetary stances.
The News Chronicle gathered that the overall sentiment in the domestic bond market has been shaped largely by worries over policy direction and the need for portfolio protection.
Fixed-income dealers noted that investors preferred to stay defensive while waiting for clearer signals on interest rate trends.
During the week, the Debt Management Office conducted a major bond auction worth N460 billion, significantly above the N260 billion issued in the previous sale. The offer was split evenly between the AUG 2030 and JUN 2032 papers at N230 billion each.
Although the auction recorded strong participation, demand was less aggressive than seen earlier in the year, with subscriptions reaching N657.26 billion. The JUN 2032 paper attracted the bulk of the interest, accounting for more than N509 billion in bids.
Stop rates rose slightly to 15.90 per cent and 16 per cent, signaling investor efforts to secure higher returns in anticipation of further repricing in the market.
However, Nigeria’s Eurobond segment moved in the opposite direction, extending its bullish momentum. Average Eurobond yields fell by 33 basis points to 7.43 per cent, buoyed by stronger investor confidence, improving external reserves and more positive fiscal signals. Analysts said the contrast between domestic bonds and Eurobonds reflects deeper trust in Nigeria’s external debt outlook.
Looking ahead, analysts at Cowry Research expect the local bond market to remain pressured as investors stay risk-averse amid economic reforms and inflation concerns. They project that Eurobonds will continue to benefit from foreign interest and improving macroeconomic stability.
