Treasury Bills Yield Dips to 25.22% Amidst Inflation Fear
The average yield on Nigerian Treasury bills dipped as investors showed appetite for long-dated instruments in the secondary market ahead of inflation. In their separate notes, analysts estimated that the inflation rate will rise further, with some projections taking the figure above 35%.
On Monday, the segment opened the week on a relatively active note with a bullish tilt as local investors took position at the long end of the end with mild buying interest at the belly of the curve. Despite the buying appetite, trading activities were generally limited due to wide bid-offer spreads, with only a few trades executed.
In its note, TrustBanc Financial Group Limited said most of the buying interest was concentrated at the long end of the curve, with notable activity on the 25-Dec and 8-Jan bills, quoted at 22.15/21.80 and 22.10/21.75, respectively.
The short end of the curve also saw some action, particularly with the February and March bills. Across the curve, the average yield expanded at the short (+9bps) and long (+1 bp) ends, following sell pressures on the 42-day to maturity (+92bps) and 315-day to maturity (+62bps) bills, respectively.
However, yield contracted at the midpoint (-5bps) segment due to the demand for the 147-day to maturity (-6bps) bill. In contrast, the average yield contracted by 6 bps to 27.8% in the OMO bills segment.
Overall, the average benchmark yield declined by 5 bps to close at 25.22%. Fixed income market analysts expect the current market sentiment to persist this week. #Nigerian Treasury Bills Yield Dips to 25.22% Amidst Inflation Fear CBN Opens FX Window for BDC to Stock up at NFEM Rate
