Nigeria’s fixed income market ended the week on a bullish note, as yields dropped across the Treasury bills, local bonds, and Eurobond markets. This was revealed in a fresh market update from Meristem Securities Limited, which showed growing investor interest across all maturities and instruments.
In the Treasury bills secondary market, average yields fell slightly by 5 basis points to settle at 20.84 per cent, compared to 20.90 per cent recorded the previous week. The short end of the curve recorded the most activity, with yields on the 20-day, 34-day, and 83-day bills dropping by 53 basis points, due to strong investor demand.
Mid-tenor bills also saw increased interest, particularly in the 264-day instrument, which recorded a 28 basis points decline. Overall, the mid-segment saw the sharpest contraction, falling by 102 basis points. Meanwhile, the long end of the curve also posted a mild drop of 7 basis points, led by declines in the 279-day and 356-day bills, which fell by 39bps and 19bps respectively.
The bullish sentiment also extended to the local bond market. The average yield across Federal Government of Nigeria (FGN) bonds dropped by 4 basis points, from 19.07 per cent to 19.03 per cent. Buying activity was strong at the short and mid segments of the curve.
At the short end, bonds like the MAR-2026 and JAN-2026 dropped by 17bps and 6bps respectively, resulting in an overall 10bps fall in that segment. In the mid segment, yields contracted by 43bps, driven by demand for the JUL-2034 bond, which dropped by 27bps.
The long end of the curve also followed the trend, with average yields dropping by 58 basis points. Key movers included the APR-2037 and APR-2049 bonds, which fell by 20bps and 18bps, respectively, indicating investor appetite for longer-term government securities.
In the Eurobond market, Nigerian sovereign bonds experienced another week of strong bullish activity. According to Meristem, average yields fell sharply by 60 basis points, from 10.39 per cent to 9.79 per cent. The rally was broad-based, with all maturities seeing price gains and yield declines.
Among the top movers were the MAR-2029 and NOV-2027 Eurobonds, each dropping by 75 basis points, while the SEP-2028 bond saw a 67bps decline. Analysts at Meristem linked the bullish performance in the Eurobond market to improved global macroeconomic sentiment. This was largely due to a temporary easing of trade tensions between the United States and China, which helped boost investor confidence.
The general bullish performance in all segments of the fixed income market was driven by a mix of strong local demand, attractive yield levels, and improving external conditions. These factors have made Nigerian fixed income instruments more appealing to investors both at home and abroad.
Analysts say that if Nigeria continues to enjoy macroeconomic stability, and if the Central Bank of Nigeria (CBN) maintains a policy stance that supports investment in fixed income, then the market is likely to remain attractive in the short term.
Business analysts also note that the recent inflow of funds into the fixed income market may be linked to uncertainty in other investment options, as well as expectations that interest rates could remain high in the near term.
