Investor demand for Federal Authorities of Nigeria bonds declined considerably in March 2025 as complete subscriptions dropped to N530.31bn, representing a pointy 67.5 per cent fall from the N1.63tn recorded in February.
The decline follows two consecutive months of sturdy investor participation and suggests a waning urge for food amid altering market situations.
In accordance with the public sale end result launched on Tuesday, the public sale carried out by the Debt Administration Workplace on March 24 featured re-openings of the 5-year 19.30 per cent FGN APR 2029 bond and the 9-year 19.89 per cent FGN MAY 2033 bond.
Whereas each devices had a mixed provide dimension of N300bn, investor curiosity was markedly decrease than the earlier month’s efficiency.
Curiosity remained skewed in the direction of the longer-tenured 2033 bond, which attracted N471.24bn in bids in comparison with simply N59.07bn for the 2029 bond.
For the shorter-dated paper, solely N4.69bn was allotted by way of aggressive bids, whereas N91.30bn got here from non-competitive allotments, making a complete of N95.99bn.
The marginal price for this bond cleared at 19.00 per cent, although the unique coupon of 19.30 per cent might be maintained.
Learn Additionally:
The 2033 bond, against this, obtained sturdy curiosity, with N266.54bn allotted by way of aggressive bids and one other N61.15bn through non-competitive bids, bringing complete allotments to N327.69bn.
The marginal price stood at 19.99 per cent, whereas the coupon remained unchanged at 19.89 per cent.
The March end result contrasts sharply with the February public sale, which noticed record-breaking subscriptions of N1.63tn, up from N670.94bn in January.
The 67.5 per cent fall in March signifies a extra cautious outlook from buyers, probably influenced by altering financial indicators and expectations for financial coverage.
This comes as Nigeria’s annual headline inflation eased to 23.18 per cent in February 2025 from 24.48 per cent in January, in response to the Nationwide Bureau of Statistics.
The moderation in inflation might have tempered expectations for larger yields in subsequent auctions.
In complete, the DMO allotted N428.68bn from the March public sale, supported by N152.45bn in non-competitive gross sales.
Nonetheless, the stark drop in subscriptions raises questions over whether or not investor enthusiasm might be sustained with out additional yield changes.
Supply: The Punch
