FGN Bonds Bullish as Investors Lock in Attractive Yields Ahead of Auction

The FGN Bonds secondary market sustained a bullish run last week, with yields contracting across various maturities amid strong investor confidence.

The high-yield environment and expectations of attractive rates at the upcoming FGN Bonds auction fuelled demand, particularly for short- and mid-term instruments.

Investors sought to capitalise on positive real returns, driving buying interest in the 2035s, 2027s, 2039s, and JUL-30 bonds. As a result, the average yield declined by 78 basis points to settle at 19.47%.

Meanwhile, Nigeria’s Eurobond market closed on a positive note, with secondary market yields dipping by 14 basis points to 8.93%.

Renewed investor interest in sovereign Eurobonds, especially in the SEPT-28, NOV-25, and NOV-27 maturities, contributed to the rally despite the broader risk-off sentiment in emerging markets.

Looking ahead, analysts anticipate a relatively positive trajectory in the fixed-income market, with attractive yields sustaining investor participation in the secondary market.

However, they hinted that attention will shift to the Debt Management Office (DMO), which plans to offer N350 billion at the upcoming FGN Bonds auction.

The issuance includes N200 billion for the April-2029 maturity and N150 billion for the February-2031 maturity.