Treasury bills dominated market activity last month (October) as the DMO raised N1.03 trillion through its auctions. The October issuance represented a month-on-month expansion of more than ten percent, reflecting sustained and growing demand for short-tenor government securities.

Latest data from FMDQ’s markets monthly report for October 2025 showed that the bond segment softened considerably in contrast as the DMO raised N316.77 billion from Federal Government of Nigeria bonds, representing a sharp departure from the previous month’s N576.62 billion.

This decline, more than 45 percent, mirrored a recalibration of investor sentiment toward longer-dated instruments, even though demand remained robust.

Market analysts observed that investors continued to favour T-bills amid evolving monetary conditions and rising short-term yields, reinforcing the appeal of near-term instruments during periods of policy recalibration.

Despite the lower issuance volume, oversubscription in both T-bills and FGN bonds surged, reaching levels that underscored the persistent appetite for sovereign paper.

Treasury bills were oversubscribed by more than 180 percent, while FGN bonds recorded an even more dramatic oversubscription of nearly 390 percent, a sign that liquidity in the system remained strong and investors were aggressively positioning around government debt.

According to FMDQ Securities Exchange, the dynamics in the monetary space were even more pronounced, as the Central Bank of Nigeria dramatically scaled up its Open Market Operation activity.

The CBN sold an unprecedented N5.83 trillion in OMO bills during October, representing an increase of nearly 840 percent from the volumes recorded in September.

This aggressive liquidity-management stance was matched by equally strong market interest as the OMO auction was oversubscribed by almost 400 percent, reinforcing the dominance of high-yielding, short-term instruments throughout the month.

The analysts noted that October’s OMO activity represented one of the strongest policy signals in recent cycles, reflecting intensified efforts by the CBN to manage inflationary pressures and stabilise short-term liquidity conditions. Activity in the non-sovereign segment of the fixed-income market moved in the opposite direction. October saw no new listings of non-sovereign bonds on the FMDQ Exchange, while corporate bonds worth N50.57 billion matured and were redeemed. This development resulted in a slight contraction of the total outstanding value of non-sovereign bonds, bringing the figure down by more than two percent to N2.18 trillion.

Market watchers attributed the quiet corporate-bond environment to elevated borrowing costs and cautious corporate financing strategies in the face of tighter monetary conditions. Commercial paper activity, however, expanded sharply as the value of newly quoted CPs surged to N53.02 billion, representing a month-on-month increase of more than 340 percent.

According to the exchange, ten new CP programmes were quoted during the month, with financial-sector issuers dominating the listing pipeline. The total outstanding value of commercial papers also inched upward, rising to N1.17 trillion despite maturities amounting to N42.40 billion during the period. Analysts also noted that CPs remained an attractive short-term funding source for corporates seeking alternatives to traditional bank borrowing, especially in a high-interest-rate environment.