Nigeria’s sovereign debt market maintained its upward trajectory last week, with continued investor interest driving down average bond yields by 19 basis points to 18.38% from the previous week’s 18.57%.

The positive momentum was primarily fueled by robust buying activity in longer-term securities. The JAN-35, MAR-27, and APR-32 bonds experienced significant yield declines of 64, 39, and 36 basis points respectively, as investors capitalized on improved market conditions and moderating inflation concerns.

The rally wasn’t universal, however. Some profit-taking emerged in select instruments, with the APR-32 and JUN-33 bonds seeing their yields rise by 36 and 13 basis points. Financial analysts view this mixed performance as evidence of strategic positioning by large investors awaiting clearer policy direction.

Primary Market Activity Shows Strong Appetite

The Debt Management Office’s June bond auction revealed compelling investor demand despite a scaled-back offering. The agency presented N100 billion in Federal Government bonds—a substantial reduction from the typical N300 billion monthly allocation.

Investor response was overwhelming, with subscription levels reaching N602.86 billion, though final allotments totaled just N99.99 billion. The seven-year tenor attracted particular attention, accounting for over 93% of all submitted bids.

Final clearing rates were set at 17.75% for the APR-29 maturity and 17.95% for the JUN-32 bond, levels that closely matched secondary market pricing at the time.

Treasury Bills Join the Rally

Short-term government securities also participated in the positive trend, with Treasury Bill yields dropping 29 basis points to average 20.23%. The most significant declines occurred in the APR-26 (-136 bps), MAY-26 (-97 bps), and JAN-26 (-86 bps) instruments, demonstrating broad-based demand across the yield curve.

Some consolidation was evident in the NOV-25 and MAR-26 bills, where yields edged up by 8 and 5 basis points respectively due to limited selling pressure.

International Bonds Benefit from Global Flows

Nigeria’s dollar-denominated Eurobonds also attracted increased investment, with average yields falling to 8.61% from 8.97% in the prior week. The SEP-33, FEB-32, and SEP-28 issues led the compression with yield declines of 45, 44, and 39 basis points respectively.

This performance reflects growing international investor confidence in emerging market debt as global risk sentiment improves and investors search for yield opportunities in developing economies.