Investors See Lower Yield on T-Bills as Interbank Rates Fall
The fixed income securities investors see a lower yield on the Nigerian Treasury bills as interbank rates fall to single digits on robust system liquidity. Data from the FMDQ platform shows that open buy back shed 50 basis points today to close at 6%, though it has peaked at double-digit.
In the same vein, the overnight lending rate contracted by 67 basis points to 6.5% in the absence of significant funding pressures on the financial system. Low yield worries persist in the fixed income space as investors continue to scramble for upward yield repricing amidst inflation slowdown.
Both fixed income and equity market however exhibited a cold outturn Tuesday as the Central Bank calendar shows 91-day matured Treasury bill N41.358 billion for the third quarter has been re-issued as of August 26.
Also, 182-day matured treasury bills valued at N151.132 billion and 364-day worth N529.683 billion were already issued between June 3 and August 26. Meanwhile, analysts at Cordros capital said in a report that trading in the Treasury bills secondary market ended on a bullish note, as the average yield contracted by 15 basis points to 4.6%.
Across the benchmark curve, analysts spotted that the average yield tapered at the short (-44bps) end due to demand for the 72-day to maturity (-106bps) bill but was flat at the mid and long segments.
Elsewhere, the average yield at the open market operations (OMO) segment expanded by 4 basis points to 6.1%.
On the other hand, investors at the Treasury bond secondary market see a move to bearish mode, as the average yield expanded by 5 basis points to 11.1% as Debt Management Office efforts to cut interest costs on total public debts.
Across the benchmark curve, the average yield expanded at the short (+13bps), and long (+2bps) ends due to sell-offs of the APR-2023 (+33bps) and MAR-2050 (+7bps) bonds, respectively; the average yield was flat at the mid-segment.
Elsewhere, the Nigerian Interbank Offered Rate (NIBOR) fell for most tenor bucket amid financial system liquidity ease; but Nigerian Interbank-Bank Treasury Bills True Yields rose for most maturities tracked, according to Cowry Asset Limited amid sell pressure.
In the Over-the-Counter bonds market, the values of FGN bonds closed flat for most maturities tracked while the value of FGN Eurobond rose for all maturities tracked, analysts said.
Read Also: Interbank Rates Slow Down as Naira Appreciates
In the foreign exchange market, the Nigerian local currency, naira, appreciated by 0.1% to N411.08 a dollar at the Investors and exporters window and gained 0.2% to N526.00 at the parallel market.
Investors See Lower Yield on T-Bills as Interbank Rates Fall
