Follow Us on Google
Nigeria’s debt market saw a sharp spike last week as investors sold off bonds and treasury bills, driving total debt value to N91.99 trillion.
The rush came as traders braced for more interest rate hikes by the Central Bank of Nigeria (CBN) and sought higher returns to offset rising inflation.
Data from FMDQ Group Plc for the week ended November 7, 2025, showed that the total debt market expanded by 3.59% week-on-week, up from N88.8 trillion to N91.99 trillion.
The jump reflects higher borrowing costs across sovereign and corporate instruments, a reversal from previous weeks when yields had moderated.
Analysts said the sell pressure was driven by investors seeking higher returns to offset short-term liquidity constraints.
“New investors are demanding better compensation for risk, while some existing players are exiting ahead of fresh auctions,” a market analyst noted.
Others, however, pointed to strategic sell-offs by investors looking to avoid exposure to the impending Capital Gains Tax, which takes effect in January 2026.
The situation was compounded by geopolitical jitters following U.S. President Donald Trump’s threat of military action against Nigeria — a development that triggered panic sales in equities and wiped off over N2 trillion from market valuation.
In the Treasury Bills segment, yields rose sharply on the 5-Feb-2026 bill, which climbed 56 basis points to 16.23%, indicating stronger demand for short-term returns.
Other News
The 7-May-2026 and 5-Nov-2026 papers also edged up by 6bps and 2bps, respectively.
Benchmark sovereign bonds were largely stable, with moderate secondary market activity. The 17-Apr-2029 bond rose 10bps to 15.87%, while the Mar-2036 and Apr-2049 papers were flat at 15.67% and 15.57%, respectively — a sign that investors are cautiously positioning ahead of inflation data and upcoming bond reopenings.
Corporate debt performance was mixed. Yields on Dangote Industries Funding Plc (2032) rose by 11bps to 17.69%, while Axxela Funding 1 (May 2027) inched up 3bps to 20.35%.
NSP-SPV PowerCorp (Feb 2034) gained 22bps to 17.02%. Meanwhile, short-term Commercial Papers for Dangote Sugar Refinery Plc and UAC of Nigeria Plc improved to 23.96% and 22.86%, respectively, reflecting renewed corporate funding demand.
In the bond futures space, prices advanced modestly, with the 12M/17-SEP-2026 2Y FGN Bond Future gaining to 107.58 and the 10Y FGN Bond Future rising to 132.08, signalling mild optimism among investors expecting yields to ease later.
The money market remained tight, as overnight rates ticked up slightly — Open Repos stayed at 24.50%, while Overnight rates rose by 7bps to 24.79%, pointing to shrinking system liquidity.
With inflation still elevated and the CBN holding a hawkish stance, borrowing costs are expected to stay high in the near term.
Analysts say yields across Treasury bills, sovereign bonds, and corporate papers will likely remain under pressure, even as higher real returns could attract foreign and institutional investors.
Market sentiment this week is expected to focus on the upcoming FGN bond auction scheduled for November 24, where investors will compare pricing with Lagos State’s recent N200 billion bond issuance to assess risk premiums.
