Shift focus to Nigeria’s shorter-dated greenback bonds – Barclays tells traders  

Barclays has suggested traders to scale back publicity to Nigeria’s longer-dated greenback bonds and think about switching to shorter-term maturities, which now supply extra enticing yields within the mid-section of the curve.

In accordance with a Bloomberg report on Friday, analysts led by Andreas Kolbe keep an obese place on Nigerian hard-currency bonds however be aware that the nation’s yield curve has not saved tempo with the steepening seen in different rising markets.

In a lot of these markets, shorter-dated bonds have rallied extra strongly than longer-term securities.

Kolbe believes Nigerian short-dated bonds have room to catch up and suggests purchasers rotate out of the 2049 maturities into the 2033 points. The Z-spread — a measure of the chance premium adjusted for volatility — between the 2033 and 2049 bonds has flattened by round 25 foundation factors year-to-date. This, he says, makes the curve seem “too flat” in comparison with high-yield friends.

“We therefore suppose worth has shifted away from the lengthy finish and into the 8- to 10-year stomach of the curve,” Kolbe famous.

He added that the technique also needs to profit from “rolldown,” the place bond costs rise as they transfer nearer to maturity, offering additional upside to traders.

At present, Nigeria’s January 2049 bond yields roughly 10.8%, whereas the September 2033 bond presents about 10.4%. Each have seen yield declines of over 100 foundation factors since early April, pushed by improved sentiment in rising markets amid easing international tensions.

What you need to know 

Nigeria’s common yield premium over Treasuries stands at the moment at 571 foundation factors, down about 350 foundation factors since Might 2023 when President Bola Ahmed Tinubu took workplace and launched into a collection of reforms.

• The Nigerian Treasury Payments (NTB) public sale held on Might 21, 2025, witnessed intense demand from traders, with the 364-day tenor attracting N1.05 trillion in subscriptions, over thrice the N350 billion initially supplied.
• The public sale, performed by the Central Bank of Nigeria (CBN), recorded whole subscriptions of N1.17 trillion throughout the 91-day, 182-day, and 364-day devices, far surpassing the overall supply of N500 billion.
• Regardless of the sturdy demand, the CBN maintained a comparatively tight stance on charges.
• It left the cease charges for the 91-day and 182-day papers unchanged at 18.00% and 20.00%, respectively, whereas trimming the 364-day cease charge marginally by 7 foundation factors, from 19.63% to 19.56%.

This slight adjustment suggests the apex bank is attempting to handle the federal government’s borrowing prices with out dampening the investor urge for food for fixed-income devices.