Nigeria’s debt market opened the week softer, shedding ₦720 billion within two days.
Data showed that market capitalisation fell from ₦104.68 trillion to ₦103.96 trillion.
Market Value Drops
As a result, the decline reflects repricing in the fixed income market, not widespread investor sell-offs.
Meanwhile, the central bank held its latest Treasury Bills auction at the primary market.
Subsequently, yields declined across key maturities, signalling a shift towards a softer rate environment.
Auction Drives Repricing
The bank allotted ₦691.86 billion out of ₦1.05 trillion offered to investors.
Therefore, this cautious allotment reflects changing liquidity conditions and evolving monetary policy signals.
Following this, the auction outcome influenced secondary market activity and prompted investors to rebalance portfolios.
Consequently, lower yields triggered valuation losses and contributed to the overall market decline.
Mixed Yields, Stable Liquidity
In contrast, the OMO segment showed uneven yield movements and reflected mixed demand across maturities.
For instance, the June 2026 bill rose to about 20.45%, while September 2026 dropped sharply.
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Additionally, other short-term instruments posted smaller declines and signalled ongoing market adjustments.
However, Treasury Bills yields declined more gradually and aligned with softer rates at auction.
Specifically, April and May 2026 yields eased to 16.17% and 16% respectively.
At the same time, early 2027 maturities hovered near 19% and indicated stable forward expectations.
Despite these shifts, liquidity conditions remained stable across fixed income instruments.
Notably, the Open Repo Rate held at 22%, while the Overnight Rate eased slightly.
Similarly, the Federal Government bond market maintained stability and showed minimal yield changes.
Most bonds traded within a narrow range between 14.39% and 16.17%.
However, the February 2034 bond declined slightly and fell by 10 basis points to 15.95%.
In the derivatives market, bond futures pricing signalled expectations of limited near-term volatility.
For example, the March 2026 10-year contract settled at 113.44, while longer tenors remained stable.
Overall, the market contraction reflects valuation effects and maturing instruments rolling off.
Analysts see a gradual transition as yields decline across primary and secondary markets.
Ultimately, lower long-term yields suggest improving confidence and expectations of softer monetary policy.
