Investor demand for Federal Government of Nigeria bonds declined significantly in March 2025 as total subscriptions dropped to N530.31bn, representing a sharp 67.5 per cent fall from the N1.63tn recorded in February.
The decline follows two consecutive months of strong investor participation and suggests a waning appetite amid changing market conditions.
According to the auction result released on Tuesday, the auction conducted by the Debt Management Office 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.
While both instruments had a combined offer size of N300bn, investor interest was markedly lower than the previous month’s performance.
Interest remained skewed towards the longer-tenured 2033 bond, which attracted N471.24bn in bids compared to just N59.07bn for the 2029 bond.
For the shorter-dated paper, only N4.69bn was allotted through competitive bids, while N91.30bn came from non-competitive allotments, making a total of N95.99bn.
The marginal rate for this bond cleared at 19.00 per cent, though the original coupon of 19.30 per cent will be maintained.
The 2033 bond, by contrast, received strong interest, with N266.54bn allotted through competitive bids and another N61.15bn via non-competitive bids, bringing total allotments to N327.69bn.
The marginal rate stood at 19.99 per cent, while the coupon remained unchanged at 19.89 per cent.
The March result contrasts sharply with the February auction, which saw record-breaking subscriptions of N1.63tn, up from N670.94bn in January.
The 67.5 per cent fall in March indicates a more cautious outlook from investors, possibly influenced by changing economic indicators and expectations for monetary policy.
This comes as Nigeria’s annual headline inflation eased to 23.18 per cent in February 2025 from 24.48 per cent in January, according to the National Bureau of Statistics.
The moderation in inflation may have tempered expectations for higher yields in subsequent auctions.
In total, the DMO allotted N428.68bn from the March auction, supported by N152.45bn in non-competitive sales.
However, the stark drop in subscriptions raises questions over whether investor enthusiasm can be sustained without further yield adjustments.
