Nigeria’s fixed-income market tilted sharply toward short-term government securities in October as Treasury bills dominated trading and investor appetite strengthened across the money market.
Fresh data from FMDQ’s monthly report show that the Debt Management Office secured N1.03 trillion from Treasury bill auctions in October, a rise of more than ten percent from September’s issuance.
The strong performance highlights renewed investor confidence in short-tenor instruments amid shifting monetary conditions and attractive short-term yields.
The News Chronicle learned that the surge in T-bill activity coincided with a notable slowdown in longer-tenor borrowing. The DMO mobilised N316.77 billion from Federal Government bonds in October, a significant drop from N576.62 billion recorded in the previous month.
Market analysts say the shift reflects a recalibration of investor sentiment as participants seek safer and more liquid options in a tightening policy environment.
Oversubscription remained a strong theme throughout the month. Treasury bills drew bids exceeding supply by more than 180 percent, while FGN bonds saw an extraordinary oversubscription level approaching 390 percent.
Analysts believe the oversubscription figures underscore the depth of liquidity in the financial system and the sustained hunger for government-backed instruments even in a cautious macroeconomic climate.
The Central Bank of Nigeria intensified its liquidity management strategy during the period, dramatically boosting its Open Market Operations. The bank sold N5.83 trillion in OMO bills, representing an almost ninefold increase from September.
The auction attracted overwhelming demand, with subscriptions reaching nearly four times the offer size. Market observers interpret this as one of the strongest monetary signals in recent months as the bank works to contain inflation and stabilise short-term liquidity.
Activity in the non-sovereign segment moved in the opposite direction. There were no new corporate bond listings on the FMDQ Exchange in October, while existing issuances worth N50.57 billion matured.
This reduced the outstanding non-sovereign bond stock to N2.18 trillion. The subdued activity is linked to high borrowing costs and cautious capital-raising plans by corporates.
Commercial paper issuance, however, expanded significantly. New CP quotations climbed to N53.02 billion, more than tripling month on month. Financial institutions led the issuances, and total outstanding CP value rose to N1.17 trillion despite maturities during the period.
The shift in market behaviour suggests that investors will continue to favour short-term, high-yielding instruments as monetary authorities intensify efforts to stabilise liquidity and guide inflation into 2026.
