Nigerian Treasury, OMO Bills Rally, Yields Shrink
The Nigerian Treasury and OMO bills rallied in the secondary market, causing a shift in the yield curve amidst fresh open market operations (OMO) auction offers by the Central Bank.
The CBN was in the market to mop up N600 billion across two mid-tenor offers. Subscription was heavy as banks and foreign portfolio investors parked huge amounts into the open market operation instrument.
The Debt Management Office was also in the market to raise N300 billion from two reopening bonds maturing in 2029 and 2033. Amidst tepid subscription levels, the authority cut rates on Nigerian bonds and under-allotted the offer.
The drill spills into the fixed income markets, where investors scramble for high-yielding assets amidst disinflation. Even with the two auction sales, trading activities in the treasury bills segment closed on a bullish note. Analysts spotted particular interest in the July, August, and May bills.
A slew of fixed income market analysts reported that the average yield contracted by 6 bps to 20.6%. Across the curve, the average yield contracted at the short (-4bps), mid (-3bps) and long (-8 bps) segments, Cordros Capital Limited said.
Investment analysts said the yield contraction was driven by demand for 87-day to maturity (-13 bps), 178-day to maturity (-4 bps), and 346-day to maturity (-24 bps) bills, respectively. Similarly, the average yield contracted by 24 bps to 26.2% in the OMO segment. #Nigerian Treasury, OMO Bills Rally, Yields Shrink Zenith Bank Rises as Investment Firms Upgrade Target Price
