Nigeria’s sovereign bond market slipped into negative territory this week as sustained sell pressure across the yield curve pushed average yields higher, reflecting weakening investor sentiment.
Market data showed that the average yield on benchmark notes rose by 20 basis points to 16.04 per cent, up from 15.85 per cent recorded in the previous week. The downturn was driven largely by widespread divestment, particularly at the short-to-mid segment of the curve.
The most notable movements were recorded in the Mar-27 instruments, where yields surged by as much as 152 basis points and 41 basis points. Similarly, Feb-28 and Apr-29 papers saw increases of 62 basis points and 46 basis points, respectively, underscoring the broad-based sell-off.
Despite the bearish trend, some resilience emerged at the long end of the curve. Analysts at Meristem noted selective buying interest in longer-dated instruments such as the Jan-42 and July papers, as investors sought to lock in higher yields at attractive levels.
The negative sentiment extended to the Treasury bills market, where average yields edged up by 3 basis points to close at 17.47 per cent. This followed a series of primary market auctions conducted by the Central Bank of Nigeria.
At the latest Open Market Operations (OMO) auction, the apex bank offered ₦600 billion, attracting strong—though slightly reduced—demand compared to previous weeks. The subscription-to-offer ratio stood at 3.70 times, with stop rates reaching as high as 21.90 per cent for the 7-day maturity.
External pressures also played a significant role in shaping market direction. Elevated global oil prices, driven by tensions linked to the US–Iran conflict, pushed Brent crude to $104.60 per barrel. While higher oil prices typically boost Nigeria’s revenue outlook, they have also heightened global inflation concerns, influencing interest rate expectations.
Analysts noted that rising energy costs have complicated the global monetary policy outlook, reducing the likelihood of near-term rate cuts and prompting a repricing of domestic fixed-income instruments.
Looking ahead, investor focus is shifting to the Federal Government’s borrowing strategy. Bola Tinubu is seeking Senate approval for a $516.33 million syndicated loan from Deutsche Bank to finance the Sokoto–Badagry Superhighway project.
With Nigeria’s public debt estimated at ₦159.28 trillion, concerns about debt sustainability remain central to market sentiment. Analysts expect cautious trading in the near term as investors balance the prospects of infrastructure-driven growth against the risks of a rising debt burden.
