Investors Bet on Nigerian T-Bills With 16.85% Yield Vs Inflation
The average yield on Nigerian Treasury bills declined as investors ramped up naira assets in the secondary market a week after the Central Bank maintained rates across standard tenors at the main auction.
Investors hunt for Treasury bills in the secondary market, seeing that the average yield has remained above 16.05% and annual inflation has sufficiently covered their price fluctuation exposures.
Banks are betting hard to boost earnings amidst low appetite for lending due to rising default risks and the need to cover significant provision for expected credit losses against the earnings.
Sustained demand for treasury bills was buoyed by strong system liquidity. Notably, discount rates fell across the long-dated maturities, according to AIICO Capital Limited.
These include Treasury bills that will expire in 9-Jul-2026 (35 bps), 6-Aug-2026 (36 bps) , 3-Sept2026 (36 bps) , and 5-Nov-2026 (13bps).
“…we observed yield contractions in most bills, especially the 03-SEP (-48 bps) and 17-SEP (-49 bps) bills, leading to the long end of the curve contracting the most by 23 bps,” CardinalStone Securities Limited told investors in a note.
Across the curve, Cordros Capital Limited reported that the average yield contracted at the short (-1 bp), mid (-4 bps), and long (-22 bps) segments.
Fixed income market analysts said the yield contraction was driven by the demand for the 72 day to maturity (-1 bp), 177-day-to-maturity (-30 bps) and 296-day-to-maturity (-22 bps) bills, respectively.
At the close of the trading session, the average yield on Nigerian Treasury bills contracted by 11 basis points to 16.85%, separate analysts said in their fixed income market reports reviewed by MarketForces Africa.
Likewise, the average yield contracted slightly to 21.5% in the OMO segment due to positive investors’ appetite for most juicy fixed-interest assets. Analysts said the short- to mid-dated bills traded quietly.
Analysts expect the market to trade in line with the prevailing market liquidity and in reaction of the MPC adjusting the symmetric corridor to +50/-450 around the MPR. #MTN Nigeria Sets to Pay Shareholders Interim Dividend
