SAT MAY 23 2026-theGBJournal| Nigeria’s fixed-income market delivered mixed signals during the week as abundant system liquidity, boosted by N2.25 trillion in OMO maturities, fueled strong demand for Treasury bills and pushed secondary market yields lower.
At the same time, the Central Bank of Nigeria’s aggressive N3.69 trillion OMO auction absorbed excess liquidity from the banking system.
The overnight lending rate remained stable at 22.2%, reflecting comfortable market conditions despite the liquidity mop-up.
Investor appetite for government securities remained robust, with the latest Treasury bills auction attracting nearly N2 trillion in subscriptions and a bid-to-offer ratio of 3.1x.
Average yield declined by 7bps to 18.9%. Across segments, the average yield in the NTB secondary market expanded by 1bp to 17.5%.
Meanwhile, the average yield in the OMO secondary market contracted by 1bp to 21.1%.
However, sentiment in the bond market weakened as offshore investors trimmed holdings of longer-dated instruments, driving average FGN bond yields higher and pushing stop rates at the latest bond auction above previous levels, highlighting a divergence between strong short-term demand and growing caution toward longer-term fixed-income assets.
Consequently, the average yield expanded by 12bps to 16.2%.
Across the benchmark curve, the average yield contracted at the short (-8bps) end, driven by the demand for the MAR-2027 (-109bps) bond.
Conversely, the average yield expanded at the mid (+5bps) and long (+33bps) segments, due to sell pressures on the FEB-2031 (+52bps) and APR-2037 (+173bps) bonds, respectively.
At Monday’s FGN Bond auction, the DMO reopened the JAN-2035 and APR-2037 bonds, offering a total of N600.00 billion.
Total demand settled at N516.15 billion (bid-to-offer: 0.9x), with the DMO eventually allotting N334.53 billion (bid-to-cover: 1.5x).
The stop rate on the JAN-2035, which was on-the-run last month, expanded by 41bps to 17.00%, while the stop rate on the APR-2037 settled at 17.04%.
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