Nigeria bonds market shocked investors as FMDQ’s capitalisation fell ₦2.53 trillion in two days.
Market value slid from ₦89.52 trillion on Monday to ₦86.99 trillion by Tuesday.
Market Capitalisation Drops
Consequently, the 2.82% decline became one of the quarter’s steepest short-term losses.
Heavy bond selling pushed yields higher across benchmark FGN securities almost immediately.
Prices fell “almost across the board” because investors demanded higher returns amid uncertainty.
Bonds Selloff Drives Yield
Two main factors triggered this sudden yield spike.
First, a planned CBN bond issuance failed, forcing investors to move liquidity into the secondary market.
“When the CBN blocked the issue, all money rushed into secondary bonds,” said CEO of APT Securities Limited, Mallam Garba Kurfi.
Second, year-end cash pressures led investors to sell bonds, even at discounted prices.
“December’s heavy cash demands pushed holders to sell, amplifying price drops and yield spikes,” said, CEO of Maxfund Africa, Charles Fakrogha.
Twelve benchmark FGN bonds experienced yield increases, mainly on mid- and long-term tenors.
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Six bonds closed flat, and only one showed a minor positive change.
Therefore, the price drop slashed trillions from outstanding securities’ market value.
Investor Strategy And Outlook
Short-term OMO bills rose slightly, while yields dipped, reflecting safe investor demand.
Longer-dated NT-bills posted significant yield increases as investors shifted funds to liquid assets.
Money-market rates stayed high; OPR held at 22.50%, and overnight rates climbed to 22.76%.
Bond futures fell, signalling that investors expect high yields to persist in the near term.
NITTY rates climbed across most tenors, whereas NIBOR eased slightly for short maturities.
Investors actively bought long-dated securities, expecting inflation and interest rates to gradually moderate.
Kurfi explained that locking a 270-day instrument today ensures predictable returns for nine months.
Meanwhile, Fakrogha advised patience: “Volatility drives financial markets; clearer trends should appear soon.”
Analysts confirmed that turbulence reflects normal year-end recalibration rather than a systemic market crisis.
