FGN Bond Yields Edge Higher As Secondary Market Activity Stays Muted

Federal Government of Nigeria Bond yields rose marginally in the secondary market last week, as a combination of selective selling and portfolio repositioning pushed the average benchmark yield one basis point higher to 15.79 percent, from 15.78 percent the previous week.

Investment research firm Afrinvest Securities Limited, which tracked the week’s activity, described the market’s performance as relatively steady, though sentiment remained mixed as investors recalibrated their exposure across different maturities.

At the short end of the yield curve, yields declined by one basis point to 16.13 percent, a movement analysts attributed to continued investor appetite for shorter-duration instruments — a preference driven largely by liquidity considerations.

The mid-tenor segment, however, came under noticeable selling pressure, with yields rising 14 basis points to 16.38 percent.

The FGN May 2033 and FGN June 2033 bonds were among the instruments driving that shift, posting average yield increases of 34 basis points and 29 basis points, respectively.

Afrinvest Securities’ debt market analysts linked the mid-tenor selloff to portfolio reshuffling, likely triggered by the outcome of the Debt Management Office’s most recent primary market auction.

At the long end, yields moved in the opposite direction, falling three basis points to 14.77 percent. The FGN January 2042 bond led the decline, contracting 27 basis points, a pattern analysts said points to firming demand for longer-dated paper as investors position to lock in current yield levels before any potential shift in the rate environment.

At its March auction, the DMO offered N750 billion across three reopened instruments — the FGN August 2030, FGN June 2032, and FGN May 2033 bonds — spanning the five-, seven-, and ten-year tenors on the local curve.