Nigeria’s Bond Yield Declines after DMO Auction

Nigeria’s bonds experienced selloffs in the secondary market midweek after Debt Management Office’s (DMO) monthly auction sales.
Nigeria’s debt office sold new and old bonds to market participants, raising more than N427 billion in addition to N46 billion allotted to non-competitive bids.

With this, market prices of FGN bonds remained relatively stable across most maturities. Notably, the average yield in the secondary market contracted to 13.49% due to increased buy interest, particularly on midterm bonds, according to Cowry Asset Management Limited.

The investment firm stated that benchmark 10-year, 20-year, and 30-year FGN bond yields held steady at 14.23%, 15.35%, and 15.60%, respectively. Elsewhere, the value of the FGN Eurobond closed lower for all of the maturities tracked due to sustained bearish sentiment.

Consequently, the average secondary market yield expanded further to 11.33%. Cordros Capital told investors in a market note that the average yield expanded at the short (+7bps) and long (+7bps) ends across the benchmark curve.

The surge was a result of profit-taking activities on the JAN-2026 (+35bps) and JUN-2053 (+1612bps) bonds, respectively. Conversely, the average yield contracted at the mid (-185bps) segment following buying interest in the JUL-2030 (-523bps) bond.