SAT JAN 31 2026-theGBJournal| Nigerian Treasury yields fell on Friday after a significant volume of unsuccessful FGN Bond primary-auction bids entered the secondary market, and investors pin focus on next NTB auction.
Strong system liquidity dominated the Treasury Bills market. Consequently, the average yield across all instruments decreased by 50bps to 19.9%.
Across segments, average NTB yields decreased by 28bps to 18.2%, while average OMO yields declined by 86bps to 21.5%.
The Central Bank of Nigeria (CBN) announced an OMO auction on Tuesday, offering N600.00 billion across the 210‑D and 350‑D maturities.
Total subscriptions reached N4.80 trillion, yet no sales were made. The CBN announced another OMO auction on Thursday, offering N600.00 billion across the 208‑D and 348‑D maturities.
Demand remained strong, with total subscriptions reaching NGN5.92 trillion. The CBN ultimately allotted N3.78 trillion across both maturities at stop rates of 17.20% and 17.25%, respectively.
Looking ahead, we anticipate bearish sentiments in the Treasury bill secondary market, given the NTB auction scheduled for next Wednesday (February 4), at which the DMO is expected to supply N1.15 trillion.
The FGN bond secondary market was bullish this week also as a significant volume of unsuccessful primary-auction bids entered the secondary market.
Consequently, average FGN bond yields decreased by 43bps to 16.5%. Across the curve, the average yield decreased at the short (-73bps) and mid (-35bps) segments, driven by demand for the FEB-2031(-94bps) and APR-2032 (-88bps) bonds, respectively, while it closed flat at the long end.
At Monday’s FGN bond auction, the Debt Management Office (DMO) reopened the FEB-2031, FEB-2034 and JAN-2035 bonds, offering a total of N900.00 billion. Total demand settled at N2.25 trillion (bid-to-offer: 2.5x), with the DMO eventually allotting N1.54 trillion (bid-to-cover: 1.5x) at respective stop rates of 17.62%, 17.50%, and 17.52%.
Next week, bearish sentiments may return following the expectations of elevated stop rates at the NTB auction scheduled for next week.
Meanwhile, the OVN rate expanded by 4bps to 22.8%, as debits for the OMO (N3.79 trillion) and FGN bond (N1.54 trillion) primary market auctions outstripped liquidity inflows from OMO maturities (N2.14 trillion).
Nonetheless, average system liquidity remained strong, closing at an average net long position of N6.84 trillion (prior week: N2.08 trillion).
In the absence of further mop-up activities, inflows from OMO maturities (N1.03 trillion) are expected to bolster system liquidity, potentially exerting downward pressure on the OVN rate.
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