Bond Market Holds Steady as Yields Close Flat at 16.97% Amid Cautious Trading

The Federal Government of Nigeria (FGN) bonds market ended the latest trading session on a quiet note, with investors maintaining tight positions as average yield closed flat at 16.97%.

Market analysts at Credit Rating Services noted that trading remained thin, reflecting investor caution amid economic uncertainties, fluctuating returns, and intermittent profit-taking activity.

Across the benchmark curve, yields showed mixed movements. The short end expanded slightly by one basis point, driven by profit-taking on the March 2027 FGN bond, which rose two basis points. The mid and long ends, however, stayed broadly unchanged.

At the mid-segment, yields contracted marginally by three basis points, influenced by selloffs on the February 2034 paper, which fell by 24 basis points. The market recorded bullish activity on the 2031 and 2033 bonds, where yields declined sharply, although overall trade volumes remained low.

In contrast, the Treasury bills market closed on a bearish note, with average yield climbing eight basis points to 18.72%. The increase was largely driven by strong demand for long-dated bills, particularly the newly issued one-year instrument, which dominated trading activity.

Analysts highlighted that while early interest in bonds was seen in the 2029, 2031, 2033, and 2053 maturities, overall trading volumes were limited. Activity picked up later in the week as buying pressure on the 2031s and 2033s pushed yields down by 25 and 40 basis points, respectively.

Despite the cautious tone in both markets, investors continue to watch for macroeconomic triggers that could shift sentiment and provide fresh direction for yields.