MON MAY 25 2026-theGBJournal| Investor appetite for government securities strengthened across Nigeria’s fixed-income market, pushing yields lower in both the Treasury bills and Federal Government bond segments.
The rally came amid improved system liquidity conditions, which also saw the overnight lending rate ease to 22.2%, reflecting reduced funding pressures in the money market.
Strong buying interest in medium- and long-dated instruments helped sustain the bullish sentiment, as investors continued to position for attractive real returns and potential moderation in interest rates.
The overnight lending rate declined by 5 basis points (bps) to 22.2%, supported by the absence of significant liquidity strains within the banking system.
In the Treasury bills secondary market, trading closed on a bullish note, with the average yield falling by 3bps to 17.5%. Market activity was largely driven by demand for medium- and long-tenor bills, although some profit-taking emerged at the short end of the curve.
Across the curve, the average yield expanded by 2bps at the short end, primarily due to sell-offs in the 24-day-to-maturity (DTM) bill, whose yield rose by 21bps.
However, yields declined by 3bps and 6bps at the mid and long ends, respectively, supported by sustained demand for the 178DTM and 206DTM bills, which recorded yield declines of 9bps and 38bps.
Similarly, activity in the Open Market Operations (OMO) segment remained positive, with the average yield contracting by 2bps to 21.1%, reflecting continued investor interest in high-yielding short-term instruments.
The bullish sentiment extended to the Federal Government bond (FGN) market, where the average secondary market yield declined by 11bps to 15.8%.
Demand was concentrated in key benchmark securities, particularly in the short and medium segments of the curve.
At the short end, yields eased by 2bps following buying interest in the FEB-2031 bond, while the mid-segment recorded a sharper 48bps decline, driven largely by strong demand for the MAR-2036 bond, whose yield fell by 104bps.
However, the long end bucked the trend, with yields rising by 5bps as investors took profits on the APR-2037 bond, pushing its yield up by 206bps.
Analysts said the broad-based decline in yields across fixed-income instruments underscores persistent investor demand for government securities amid ample liquidity and expectations that yields could remain relatively stable in the near term.
The trend also reflects investors’ preference for locking in attractive returns ahead of potential shifts in monetary policy and inflation dynamics.
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