Fixed Income Investors Take Profit on TBills after Rate Hike
Fixed income investors took profit on Nigerian Treasury bills (NTB) in the secondary barely 24 hours after the Central Bank increased rate on the naira asset.
The Treasury bills market closed in the red with average yields inching up by +13 basis points (bps) to 16.95% from 16.82% the previous day – return still tracking ahead of headline inflation.
The sell actions, triggered by expectations’ happened following the introduction of Dec-26 paper, with a yield of 20.47%, impacting the market’s average yield.
Selloffs were recorded in a few papers, including Jun-26 (+14bps) and Nov-26 (+11bps) maturities, according to investment firm Meristem Securities Limited. Investor interest remained center on the one-year bill, which closed at 17.00%.
Meanwhile, mild buying interest was observed on other maturities across the curve, except for the Mar-26 paper, which saw a yield decline of 7bps. Fixed income market investors digested midweek auction, where ₦709.6 billion was allotted and the 364-days tenor cleared sharply higher at 17.50% than the previous auction.
In an investors note, AIICO Capital Limited said the new 364-days bill saw modest interest, while selective demand caused slight rate declines except for the 04-Ju-26 bill, which rose 13bps.
Analysts expect quiet to cautious trading activities tomorrow as digest the possible impact of the revised auction calendar on the projected quiddity inflow. #Naira for Dollar Rate Drops Slightly in Forex Markets
