Elevated web liquidity of N6.17 trillion triggered a fall in yields throughout Nigeria’s mounted revenue markets in the course of the week ended Friday, November 14, reversing slight will increase in charges within the earlier week that noticed complete debt worth at FMDQ bounce to N91.89 trillion, up from about N88 trillion.
A wave of placements on the Standing Deposit Facility of the Central Bank of Nigeria (CBN), mixed with maturities from the Open Market Operation (OMO) in addition to main market repayments, pushed web liquidity to N6.17 trillion, a exceptional 57.80% week-on-week surge.
Cordros Analysis corroborated this liquidity growth, noting the system obtained N3.63 trillion in OMO maturities, positioning it at N5.09 trillion web lengthy, even with out CBN mop-up interventions.
Regardless of the liquidity abundance, the In a single day (OVN) price edged greater by 13 foundation factors to 24.9%, although different funding pressures softened as banks had little must borrow. Yields on the NIBOR and NITTY curves largely declined, reflecting the convenience in system pressures.
With upcoming FGN bond coupon inflows of N151.63 billion, analysts anticipate liquidity to stay strong, maintaining short-term charges contained.
Treasury Payments: Robust demand pulls yields decrease
The secondary Treasury payments market surged with bullish sentiment as traders scrambled to deploy extra money. Cowry Property reported that common NTB yields fell 44 foundation factors (BPS) to 16.98%, led by robust shopping for curiosity within the newly issued 5-Nov invoice, which tightened from 15.70% to fifteen.30%.
Cordros’ estimates align intently, placing NTB yield compression at 41 bps to 17.0%, whereas OMO yields fell even additional, 51bps to 21.7%.
OMO market exercise was notably intense, pushed by extra liquidity. Cowry highlighted the week’s star occasion: the November 13 OMO public sale, the place the CBN offered N2.55 trillion throughout two short-tenor payments. Demand was overwhelming, with subscriptions hitting N3.09 trillion—a staggering 515% oversubscription.
With the DMO set to public sale N700 billion in NTBs on 19 November, analysts anticipate demand to stay feverish, supported by recent inflows and anticipation of continued inflation moderation.
Nigerian Bond Market sees renewed confidence
The secondary bond market closed the week strongly bullish as traders sought safer yield amid volatility in equities and different high-risk belongings. Each Cowry Property and Cordros Analysis reported widespread demand throughout the curve:
- Common FGN bond yields fell 20bps to fifteen.6–15.57%.
- The brief and mid segments noticed the sharpest contractions, pushed by robust buys in FEB-2031 (-42bps) and APR-2032 (-54bps).
- Lengthy-term yields held regular, although demand remained wholesome.
Analysts attribute this rally to improved fiscal alerts from the federal authorities, regular financial circumstances, and the relative attractiveness of Nigerian sovereign belongings.
Wanting forward, yields are anticipated to keep up a gradual downward trajectory, with the approaching NOV-2025 Eurobond maturity prone to intensify investor curiosity.
Eurobonds prolong good points on robust exterior sentiment
Nigeria’s sovereign Eurobonds continued their upward momentum, with the common yield declining 21bps to 7.77% week-on-week. This displays a renewed urge for food for Nigerian danger in world markets and aligns with enhancing home fundamentals.
The compression in Eurobond yields suggests traders are more and more prepared to simply accept decrease returns in alternate for perceived stability.
Ahead charges, nevertheless, noticed delicate depreciation throughout tenors, indicating cautious hedging by market members.
A market using the wave of liquidity and confidence
Each Cowry Property and Cordros Analysis agree: Nigeria’s fixed-income universe is poised for continued power. With huge inflows, easing inflation expectations, and sustained investor demand throughout NTBs, OMOs, bonds, and Eurobonds, yields are prone to development decrease within the close to time period. The anticipated two extra OMO auctions subsequent week underscore the CBN’s intent to handle liquidity whereas sustaining market stability.
For traders, the week’s developments reinforce the strategic case for Nigerian fixed-income belongings as defensive performs amid broader market volatility.
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