Nigeria Bonds, T-Bills Yields Ease on Naira Assets Attraction
Nigeria’s Yields slipped in the secondary market for government short- and long-term borrowing instruments as investors circled around naira assets ahead of the release of inflation data.
The country’s risk premia continue to decline amid sustained demand for bonds and treasury bills, driven by still-elevated yields across the short and long ends of the curve.
Improved macroeconomic conditions and stable local currency continue to attract local and foreign portfolio investors, driving yields on the naira asset lower.
The monetary authority has continued to scale back interest rates on Nigerian Treasury Bills, though the Debt Office made a small adjustment to rates on reopened government bonds last month.
Market analysts said all these efforts are geared towards a sharp reduction in local debt servicing costs, which remain elevated due to weak external debt competitive pricing.
On Tuesday, the secondary T-bill market sustained its bullish momentum, with the average yield declining further by 4bps to 17.44%.
In its investors’ note, Meristem Securities Limited said buying interest was observed across the curve; however, it was dominant on the long end, with the 18-Mar-27 (-41bps), 8-Apr-27 (-31bps), and May-27 (-23bps) bills recording the strongest demand.
Nonetheless, pockets of buying interest were seen in the 17-Sept-26 (+3bps), 25-Mar-27 (+3bps), and 22-Apr-27 (+12bps) bills.
The bond market also extended its positive momentum, with average yields moderating by 1 bp to 16.08%. Trading activity was relatively quiet, Meristem Securities Limited said.
However, buying interest concentrated in instruments in the short to mid end of the curve, including the Mar-27s (-15bps each), May-33 (-2bps), and Jun-33 (-1bp).
The National Bureau of Statistics (NBS) is scheduled to release the April inflation figures by Friday. The market consensus is that the consumer price index will rise further after the first month of disinflation in March. Financial System Liquidity Spikes 40% on OMO Repayment
