Nigerian Treasury Bills Yield Climbs 36 Basis Points over Selloffs
The average yield on Nigerian Treasury bills edged higher by 36 basis points on Wednesday in the secondary market as investors dumped naira denominated assets. The financial market nosedived with market wide negative perception spur by uncertainties in the economy.
The equities market witnessed sell pressures, the naira exchange rate crossed near N1500 per US dollar and fixed interest securities offloaded their interest in Nigerian Treasury bills on Wednesday.
Consequent to the risk off sentiment, the average yield expanded by 36 36 basis points to 22.1%. In their separate investment notes, firms said the average yield pared at the short (-1bp) and mid (-1bp) segments.
The yield contraction followed demand for the 92-day to maturity, whose yield dipped -1bp, according to Cordros Capital Limited in a note.
There was buying interest at the belly of the curve. Demand for 169-day to maturity bills dropped by -1bp. On the other hand, the market witnessed selloff at the end of the curve.
As such, yield advanced at the long end by 40bps as market participants sold off the 351-day to maturity whose associated yield rose +25.46 percentage points. Similarly, the average yield increased by 60bps to 22.0% in the OMO bill segment in the secondary market.
In the money market, the Nigerian interbank borrowing rate advanced by 3.78% to hit 30.17%, as illiquidity pressure return, Cowry Asset said in its market update.
Additionally, key money market rates such as the Open Repo Rate (OPR) and Overnight Lending Rate (OVN) advanced by 1.74% and 1.76% to reach 29.68% and 30.26%, respectively. Money market rates inched higher following the settlements for the OMO bills auction worth N513.95 billion conducted on Tuesday by the Central Bank of Nigeria. #Nigerian Treasury Bills Yield Climbs 36 Basis Points over Selloffs
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