DMO Set for N100bn Bond Auction

• As Fixed Income Market Rallies on Ratings Boost, Strong Demand

In the new week, analysts expect bullish momentum to persist across both local and foreign bond markets, aided by favourable sentiment and strengthening fiscal buffers. On the domestic front.

The Debt the Management Office (DMO) is set to raise N100 billion via bond issuance at its scheduled auction on Monday, offering N50 billion each in a 5-Year reopening of the April 2029 bond and a new 7-Year June 2032 issuance.

A robust outing is anticipated, as the DMO seeks to tap the local market to meet the federal government’s funding obligations for the fiscal year.

Last week, the fixed income market closed on a positive note, buoyed by improved investor sentiment, stronger sovereign ratings outlook, and resilient demand across maturities.

Activity in both the local and international bond markets was largely upbeat, with yields moderating in response to renewed buyside interest.

In the FGN Bonds secondary market, moder- ate bullish sentiment was observed, particularly on select maturities. Yields on the JAN-35, JUN-38, and MAR-26 instruments fell by 57 basis points, 57 basis points, and 60 basis points, respectively, reflecting in- creased demand.

As a result, the average yield across the FGN Bonds curve declined by 25 basis points week on-week to 17.83%, marking a notable improvement in domestic bond appetite.

Meanwhile, the Eurobond market extended its bullish trend, with investor interest spanning short-, mid-, and long-term tenors.

Strong buying was recorded on the NOV-25, NOV-27, SEP-33, and FEB-38 Eurobond maturities, pushing the average sovereign Eurobond yield down by 28 basis points to 8.97%.

The positive performance was largely driven by improving macroeconomic sentiment and Nige- ria’s ongoing reform efforts.

Meanwhile in the foreign exchange market, the Naira Held Ground on CBN Support even as Oil Prices Climbed as Middle East Conflict Intensifies.

Experts expect the naira to remain relatively stable in the new week, supported by continued CBN interventions and improving foreign exchange inflows as reforms gain traction.

In the foreign exchange market, the naira showed some resilience last week, as the Central Bank of Nigeria injected $41 million into the market to ease corporate dollar demand pressures.

This intervention, part of a broader FX reform strategy, coincides with a rebound in Nigerian banks’ net foreign assets, which have reached their highest levels in over a decade— signalling improved market confidence.

As a result, the naira appreciated by 0.13% week-on-week to N1,547/$ at the official window, although it weakened slightly by 0.32% to N1,585/$ at the parallel market.

Crude oil prices are on track to notch a third consecutive weekly gain, driven by escalating tensions between Israel and Iran, forcing many oil shippers to reroute or avoid the Strait of Hormuz—a key global transit point—due to surging tanker rates and insurance costs.