Bullish T-Bills Run Ahead as CBN Rejects Bids, Prices 1-Year Bill at 17.66%
The market anticipates a bullish run in secondary market transactions for Nigerian Treasury bills on Thursday, a day after the Central Bank of Nigeria (CBN) rejected 60% of the aggregate subscription at its auction.
The average yield on Nigerian Treasury Bills steadied in the secondary market as investors shifted attention to the primary market auction on Wednesday, where an N600 billion offer size was opened for investors’ subscription.
Traders are now anticipating a bullish run after the CBN rejected 60% of the more than N3 trillion total subscriptions received at the midweek auction. Investors will seek to fill the gap in the secondary market on Thursday, separate fixed income market traders told MarketForces Africa.
Post-auction, the 15 July 2027 bill was quoted at 17.45%/17.40%, according to Herwood Capital Limited. Still, some selective buying was reported in the fixed income market on Wednesday, supported by rising liquidity in the money market and a surprise slowdown in the inflation rate, despite weak naira performance.
Broadsheet investment firms said that yield declined at the short (-1bp) and long (-1bp) ends of the curve, offset by expansions at the mid segment (+2bps).
Consequently, the average yield closed unchanged at 18.41%. The Treasury Bills market opened the session on a quiet note, as participants awaited direction from the Treasury Bills auction.
Nonetheless, activity was observed in some OMO bills. The 17 Nov 2026 OMO bill was seen trading at 20.11% bid. In the segment, Nigerian Treasury bill with 11 Mar 2027 maturity was seen trading at 17.30%/17.05%.
The NTB auction recorded strong demand, with total subscriptions of ₦3.03 trillion against an offer size of ₦600 billion, and the DMO ultimately allotted ₦1.19 trillion.
Stop rates for 91- and 182-day Treasury papers were steady at 16.30% and 16.50%. But the CBN reduced the 364-day spot rate to 17.66% from 17.70%.
The recently released consumer price index data from the National Bureau of Statistics (NBS) showed that Nigerian headline inflation moderated to 15.91% year-on-year from 15.93% in the prior month.
This was primarily driven by a deceleration in the core basket (from 16.82% to 15.92% in June). Similarly, MoM inflation tapered to 1.66% in June from 1.75% in May.
Fixed Income Investors Boost Treasury Bills Holdings, Yields Ease
