Nigeria fixed income market sees high demand for bonds and OMO bills

Nigeria’s fixed income market has seen significant activity, driven by high demand for government securities. In a recent auction, the Debt Management Office (DMO) allotted N1.56 trillion in Federal Government of Nigeria (FGN) bonds, exceeding the initial N1.10 trillion offer. The auction included reopened bonds maturing in 2035, 2037, and 2038. The 2038 bond saw the strongest demand, attracting N821.32 billion in bids. Notably, marginal rates for these bonds declined by more than 100 basis points compared to the July auction.

In a separate weekly report, Open Market Operation (OMO) bills dominated the fixed income market, accounting for N6.01 trillion, or approximately 74 per cent, of the N8.09 trillion total face value traded. Treasury bills followed with N1.50 trillion in trades, while FGN bonds accounted for N571.65 billion. The high volume of OMO bill trades reflects investor preference for short-term instruments amid elevated yields, with OMO closing yields reaching 21.50 per cent.