Nigeria Treasury Yield Slides 9bps on Bills Buying
The Nigerian Treasury bills (NTB) yield declined by 9 basis points as investors ramped up bills in the secondary market to compensate for lost bids at the central bank primary market auction.
Ahead of inflation data scheduled to be released next week, analysts have maintained an uptrend on an expectation on the consumer price index.
Banks, pension fund managers among others exposure in the fixed income market remains large, allowing continual swing in spot rates despite changing market dynamics.
For context, banks are getting double-digit return on large funds invested in the market versus risky lending to customers amidst weakening macroeconomic conditions.
On Thursday, the secondary market for Nigerian Treasury Bills recorded positive activity, particularly at the longer end of the yield curve, CardinalStone said in its market report.
Due to buying momentum in the space, the average yield declined by 9bps to close at 11.11%, driven by a substantial yield decrease in the Nov-24 maturity, analysts said in the note reviewed by MarketForces Africa.
Across the curve, the average yield was unchanged at the short and mid segments but dipped at the long (-19bps) end due to buying interest in the 350-day to maturity (-201bps) bill.
Similarly, the average yield pared by 1bp to 14.6% at the OMO segment, according to Cordros Capital. A steep decline in funding level dragged the short-term interest rate higher in the money market.
The overnight lending rate expanded by 432bps to 21.0%, following the debits for net NTB issuance worth N500 billion. In the same vein, the FGN bonds secondary market traded with bullish sentiments, as the average yield declined by 68bps to 14.9%.
Across the benchmark curve, the average yield contracted at the short (-85bps), mid (-157bps) and long (-25bps) segments.
Fixed income analysts at Cordros Capital said in a note that the yield contraction was due to interests in the FEB-2028 (-164bps), APR-2029 (-196bps) and JUL-2034 (-99bps) bonds, respectively. Nigeria Eurobond Slumps after CBN Resumes OMO Auction
