Nigerian Treasury Bills Yield Jumps 27bps on Sell Pressure
The average yield on Nigerian Treasury bills jumped 27 basis points (bps) as sell pressure in the secondary market intensified. Investors have been trimming their holdings in response to an inflation surge, followed by spot rate adjustments at the primary market auction.
While staying cautious, some asset managers and other institutional players locked in yields at the long end of the curve amidst expectations of yields repricing.
Fixed income market analysts said investors’ reactions are informed by shifting macro indicators, with tightened returns for investors as the consumer price index inched near 16%, while the benchmark interest rate held at 26.5%.
The Nigerian markets are undergoing a new shift as investors dump debt instruments and risky assets simultaneously. The equities market closed negatively, while investors sold down bond and treasury bills despite surplus liquidity in the financial system, signalling outright capital rotation.
A slew of analysts attributed the development to foreign portfolio investors’ shift to safe havens, a trend confirmed by persistent pressure on the naira in the forex market.
Trading activity in the Nigerian Treasury bills segment ended negatively, with bearish sentiment across the short (+9 bps), mid (+28 bps), and long (+36 bps) segments of the curve. Consequently, the average yield inched up by 27bps to settle at 18.59%. DMO Hikes Rates on Bonds to Meet N1.2trn Borrowing Target
