Treasury Bills Yield Prints at 19% Before N800bn Auction
The average yield on Nigerian Treasury bills printed at 19% ahead of N800 billion auction that will be offered to investors on Wednesday. In the secondary market, traders’ mood turned green on the naira assets.
Some investors offered to sell their positions, expecting higher yields, but there was little to no demand to meet these offers across the curve, according to AIICO Capital Limited.
Across the curve, the average yield declined at the short (-1bp), mid (-1bp), and long (-1bp) segments, according to Cordros Capital Limited.
Fixed income securities analysts said the contraction was driven by demand for the 79-day to maturity (-1bp), 177-day to maturity (-1bp), and 338-day to maturity (-2bps) bills, respectively.
There was limited activity across the yield curve in the secondary market as banks and other wealth management firms prepared bids for the Treasury bills auction on Wednesday.
On behalf of the Central Bank, Nigeria’s Debt Management Office (DMO) is scheduled to offer ₦800 billion across the 91, 182, and 364-day papers. Investment firms stated that the need to prepare for the auction is likely to keep trading subdued in the secondary market, as participants channel their attention toward the auction.
The auction is expected to be oversubscribed amidst a sustained appetite for fixed interest securities, a positive real return on investment, and an improving macro data set in the country. To analysts, a huge deficit in the banking system could hurt total bids at the auction.
Similarly, the average yield declined by 1bp to 22.3% in the OMO bill segment in the secondary market. # Treasury Bills Yield Prints at 19% Before N800bn Auction Yield Slides on Post Auction Demand for Nigerian Treasury Bills
