Average Yield on Nigerian Treasury Bills Closed Flat at 0.44%

Average Yield on Nigerian Treasury Bills Closed Flat at 0.44%

Average yield on Treasury Bills closed the week at 0.44% after previous days rise due to sustained investors’ apathy amidst unimpressive returns in the fixed income market.

However, the financial system liquidity remained buoyant, though opened significantly lower at N338.7 billion from N513.4 billion yesterday.

Analysts said this was mostly driven by N70 billion open market operations (OMO) sale by the apex bank and banks provisioning for the bi-weekly retail FX auction.

Nonetheless, funding rates remained benign, with the Overnight (OVN) and Open Buy Back (OBB) rates compressing by 56 basis points (bps) and 50bps to 0.88% and 0.50%, respectively.

Looking ahead, Chapel Hill Denham believes that that supportive system liquidity will continue to keep funding pressure in check next week.

In the fixed income market, the average rates compressed by 3 bps at the secondary OMO segment of the market to close at 0.44%.

This was driven mostly by the accumulation of selected maturities across the curve.

Investors thus sustained apprehension towards the secondary Nigerian Treasury Bill market, as discount rates on benchmark remained flat at 0.44%.

Elsewhere, in the bond segment, the market traded bearish today as duration apathy continued.

Precisely, yields expanded by as much as 33bp on average across the benchmark curve to close at 4.91%.

This was driven mostly by the sell-offs in the mid day to maturity (+30bps to 5.01%) and long (+67bps to 6.93%) tenured instruments.

Analysts at Chapel Hill Denham stated that the preceding outweighed the slight moderation at the short end of the curve (-3bps to 2.21%).

Read Also: Yields Drop to New Records Lows as Market Reacts to DMO Circular

Meanwhile, a Bond auction is expected to be conducted by the Debt Management Officer (DMO) next week.

The total amount on offer is N60bn, divided equally across the MAR2025 and JUL2045 instruments, respectively.

“We expect stop rates on the auction to trend marginally lower, on the back of robust liquidity within the financial system”, Chapel Hill Denham said.

In the currency market, Naira exchange rates were unchanged at N379.00 and N380.69 at the official and SMIS windows.

The local currency appreciated slightly by 0.15% or N60 kobo at the Investors and Exporters Window.

Similarly, pressures subsided on the Naira at the parallel market, with the local currency appreciating by N1.00 or 0.21% against the US dollars to close at N476.00.