Demand for Treasury Bills Drag Yield Below 9%

The latest buying interest in the secondary market on Nigerian Treasury bills dragged the average yield down 10 basis points to 8.85%. In a note, Cordros Capital Limited said the average yield dipped at the short (-33bps) end following buying interests on the 35-day to maturity (-233bps) bill but closed flat at the mid and long segments.

Earlier in the year, the benchmark yield had dropped below 4% while the headline inflation rate doe December turned red, marking 12 consecutive upticks in 12 months. Investors continue to adjust their portfolio strategy to optimise returns on investment amidst the ongoing boom in the equities market.

Meanwhile, liquidity conditions in the money market worsened after debit for debt management office bond auction sales conducted early in the week. The Nigerian interbank offered rate rose across the board for all maturities tracked, reflecting tight money market conditions, Cowry Asset Limited said in a note.

Key money market short-term interest rates adjusted upward as a result of pressures on system liquidity.  The overnight lending rate expanded by 252 basis points to 22.9%, in the absence of any significant inflows to support the system.

Elsewhere, the average yield remained at 9.6% in the OMO bills secondary market segment over thin transaction records. Data from the FMDQ platform showed that key money market rates, such as the open repo rate and overnight lending rate surged to conclude at 21.79% and 22.92%, respectively. 

#Demand for Treasury Bills Drag Yield Below 9% Banks Face Risks over 24hrs FX Positions Sell Down