Treasury Bills Yield Reaches 15.2% Ahead of Inflation
The average yield on Nigerian Treasury bills advanced to 15.2% as fixed interest securities traders and wealth managers among other authorised dealers sold off part of their naira assets for cash.
Consequently, yield swung right after selloffs induced by the Central Bank of Nigeria (CBN) revised Treasury bills auction sales last week. According to separate investment banking firms, trading activities on Treasury bills in the secondary market ended on a bearish note on Thursday.
The average yield advanced by 8 basis points to 15.2%, Cordros Capital Limited said in a note to investors shared via email. The firm said in its update that across the curve, the average yield increased at the short (+76bps) and mid (+10bps) segments.
The yield surge occurred following sell pressures on the 57-day to maturity and 99-day to maturity bills, respectively. These short-dated Treasury bills recorded 190 and 99 basis points increases in their associated yield.
Conversely, the average yield contracted at the long (-32bps) end as investors demanded the 204-day to maturity with yield down by 97 basis points bill.
Meanwhile, the average yield pared by 1bp at 17.8% in the OMO bills segment, traders said in a note. The market is expecting inflation report for January to be posted today. Broadstreet analysts’ consensus estimates further uptick following the devaluation of the naira. Headline inflation printed at 28.92% in Dec, 2023.
Last week, the average NTB yield increased by +570 basis points to close at 15.4% due to sell-offs induced by the CBN’s revised Treasury bills auction offer.
At the primary market auction held last week Wednesday, the CBN offered and allotted N1 trillion worth of NTBs to market participants.
The stop rates increased across the three tenors; 91-day bills attracted 17.24% from 5.00%, the spot rate on 182-day bills grew to 18.00% from 7.15% and 364-day was allotted at 19.00% from 11.54%.
The average yield for OMO bills increased by +830bps to close at 17.9%, according to traders, adding that this was partly attributed to higher yields at the primary market NTB auction.
In the money market, the interbank rate increased by 0.19% to close at 16.25%. However, key money market rates, such as the open repo rate (OPR) and overnight lending rate (OVN) nosedived to 14.79% and 15.46%, respectively. #Treasury Bills Yield Reaches 15.2% Ahead of Inflation
