Nigeria successfully raised $2.25 billion in a dual-tranche Eurobond issuance on Wednesday, marking a major return to international capital markets despite geopolitical tensions following U.S. President Donald Trump’s recent threats of potential military action. The ten-year and twenty-year bonds were oversubscribed and priced at 8.625% and 9.125%, respectively — tighter than initial guidance, reflecting robust investor confidence in Nigeria’s fiscal reforms and improving risk sentiment toward frontier markets. The issuance highlights the recent rebound in global borrowing conditions, as countries such as Congo Republic, Angola, and Kenya also tapped international markets amid falling emerging market spreads. According to JPMorgan, only four emerging economies now have spreads above 1,000 basis points over U.S. Treasuries, the level typically considered too risky for external issuance. Investor appetite for Nigerian debt has been buoyed by President Bola Tinubu’s reform agenda, including the removal of fuel subsidies and the devaluation of the naira, which, although economically painful, has improved fiscal transparency and market confidence. With emerging market governments issuing nearly $240 billion in dollar debt so far this year, surpassing even pandemic-era levels, Nigeria’s return underscores both the renewed investor hunt for yield and a sign that African frontier economies may once again diversify funding sources amid more favourable global conditions.
Money Market
System liquidity remained buoyant throughout the trading week, opening at ₦3.06 billion on Monday and closing at ₦3.91 trillion. Week-on-week, the Open Buy Back (OBB) remained steady to close at 24.50%, while the Overnight (OVN) rates declined by 7bps to close at 24.79%.
We expect rate to continue to hover around this level.
Treasury Bills Market
The Treasury Bills market traded on a quiet note for most of the week, as investors selectively cherry-picked maturities across the curve amid cautious sentiment. Early in the week, mild activity was seen on the April 7 OMO bill, which was bid around the 20.30% level. The market later shifted its focus to the OMO auction, where the CBN offered ₦600 billion across the 56- and 84-day tenors, recording total subscriptions of ₦1.18 trillion and total sales of ₦273.6 billion, with the 84-day stop rate rising by 14bps to 21.84%. Midweek, participants’ attention turned to the NTB auction, where the DMO offered ₦650 billion across standard maturities. The auction saw total subscriptions of ₦1.18 trillion, with ₦546.24 billion allotted, as stop rates on the 91-day and 182-day bills held steady at 15.30% and 15.50%, while the 364-day declined by 10bps to close at 16.04%. Subsequently, the market opened on an active yet bullish note, with the newly issued 364-day bill quoted at 15.95%/15.70%, while on the OMO front, the June 23 maturity traded around 18.30%/18.10%. The week closed quietly following another OMO auction where the CBN offered ₦300 billion each on the 53- and 81-day bills, recording total subscriptions of ₦1.3 trillion and sales of ₦1.15 trillion, with the 81-day stop rate declining marginally by 1bp to 21.83%. Week-on-week, the average benchmark yield declined by 19bps to close at 17.28%.
We expect this bullish sentiment to persist in the short term.
FGN Bond Market
The FGN Bonds market opened the week on a slightly bearish note, as early profit-taking pushed yields marginally higher before renewed buying interest later reversed the move, with the 2032 maturity easing from 16.00%/15.80% to 15.85%/15.75%. Midweek, activity remained calm as investors continued to cherry-pick across the curve, with steady demand seen on the 2032s quoted around 15.85%/15.65%. Subsequently, the market traded quietly with yields largely stable, though mild buying interest resurfaced toward the end of the week, keeping the 2032s quoted at 15.75%/15.65%, unchanged from prior sessions. Week-on-week, the average benchmark yield declined by 12bps to close at 15.66%.
We expect the bullish sentiment to be sustained barring any significant outflow of liquidity.
FGN Eurobond Market
The Eurobond market opened the week on a bearish note, as heavy selling pressure emerged following heightened geopolitical uncertainty triggered by U.S. President Trump’s tweet suggesting possible U.S. military involvement in Nigeria, which rattled investors and pushed yields higher across the curve. The bearish tone persisted midweek, amid fears that potential U.S. military action could disrupt Nigeria’s oil production, a key source of export earnings, further weighing on sentiment. However, sentiment improved midweek as Trump’s threat appeared to have subsided, and attention shifted to Nigeria’s successful Eurobond issuance of 10-year and 20-year notes priced at 8.625% and 9.125%, respectively, which attracted $12.7bn in subscriptions with $2.347bn allotted. Despite renewed weakness later in the week following Trump’s reiteration of his warning, the market ended on a slightly bullish note, recovering some of the earlier losses. Week-on-Week, the average benchmark yield increased by 38bps to 7.88%.
We look forward to more updates on the U.S. government shutdown, which has now extended past the previous 35-day record and has held the release of key economic data.
Currency Market
The value of the Naira to the dollar declined by 1.04% to close at ₦1436.58/$ at the Nigerian Foreign Exchange Market Window (NFEM).
Equities Market
The local bourse ended the day with the benchmark NGX All-Share Index (ASI) depreciating by 0.33% to close at 149,524.81. Market capitalization also decreased, closing at ₦95.748 trillion. Market breadth was negative at 0.48x. Meanwhile, trading activity was mixed on the day, as the volume of shares traded decreased by 15% to 527.15 million units, while the total value of shares traded decreased by 7% to ₦15.36 billion.
Reflecting the week’s performance, the NGX All-Share Index recorded a 2.99% depreciation, as gains in NCR (NIGERIA) PLC (+20.94%), EUNISELL (+20.17%) and UNIONDICON (+9.93%) were offset by declines in SOVERENINS (-28.21%), CILEASING (-20.16%), and SKAVN (-18.99%).
Overall, the NGX has posted a year-to-date gain of 45.27%. Other notable indices are the NGX Top 30 Index (-0.32%; -3% 1WK; +43.80% YTD), NGX Banking Index (-0.88%; -3.05% 1WK; 30% YTD), NGX Oil & Gas Index (-0.25%; -4.80% 1WK; +2.25% YTD), and NGX Insurance Index (-2.15%; -9.39% 1WK; 58.09% YTD).
