Bond, Eurobond Weak Investor Demands Drive Bear Market

The Nigerian secondary bond market sustained its bearish momentum during the week, weighed down by weak investor demand and increased selloffs in the near term as investors continue to assess liquidity conditions, inflation expectations, and the direction of monetary policy. Elevated yields in the primary market may also sustain sell-side pressure in the secondary market, particularly across mid- to long-dated maturities. However, intermittent bargain hunting could emerge should yields rise to more attractive levels.

In the sovereign Eurobond market, performance is likely to remain influenced by global risk sentiment, movements in U.S. Treasury yields, and investors’ perception of Nigeria’s external position and fiscal out- look.

While elevated yields may attract selective interest from offshore investors, uncertainty surrounding global monetary conditions could keep trading activity relatively subdued.

The Nigerian secondary bond market sustained its bearish momentum during the week, weighed down by weak investor demand and increased selloffs across most maturities compared to the previous week.

Market activity remained largely subdued, reflecting cautious investor sentiment and a restrained appetite for local fixed-income securities.

Consequently, average yields edged higher by 1 basis point to close at 16.11%.

Likewise, the Nigerian sovereign Eurobond market recorded losses across the yield curve amid soft demand for dollar-denominated instruments.

The bearish sentiment pushed average yields up by 23 basis points to 6.94%, indicating weakened investor confidence and reduced appetite for sovereign Eurobonds.

Looking ahead, sentiment in the domestic bond market is expected to remain cautious in the near term as investors continue to assess liquidity conditions, inflation expectations, and the direction of monetary policy.

Elevated yields in the primary market may also sustain sell-side pressure in the secondary market, particularly across mid- to long-dated maturities.

However, intermittent bargain hunting could emerge should yields rise to more attractive levels.

In the sovereign Eurobond market, performance is likely to remain influenced by global risk sentiment, movements in U.S.

Treasury yields, and investors’ perception of Nigeria’s external position and fiscal outlook.

While elevated yields may attract selective interest from offshore investors, uncertainty surrounding global monetary conditions could keep trading activity relatively subdued in the near term.