Investors Lock In Treasury Bills Yields Ahead of Q3 Auction
Trading activity in Nigerian Treasury bills in the secondary market was bullish, with yields contracting across the curve as investors adjust their portfolios to optimise returns.
This heightened investor appetite and robust trading volume drove a positive session overall, dragging the average yield down by 4 bps to close at 18.61%.
Fixed income market analysts reported buying activity in short-term papers, dragging yields lower by 7 basis points. At the belly, demand for Treasury bills in the secondary market reduced yields by 4 basis points, while bargain hunting for long-term cut yields by 3 basis points.
Investors have begun to balance their portfolio positions ahead of the third-quarter Treasury bills calendar. Most banks and other asset managers maintain a long-term outlook for the papers amidst elevated yields. CBN Sells N1.6trn OMO Bills, Prices 7-Day Tenor at 21.9%
Traders said fixed-income market investors have been demanding higher compensation for short-term liquidity and policy uncertainty. This has triggered yield inversion in the debt market, with short-term instruments paying more than bonds.
Market analysts are anticipating aggressive Treasury bills auctions in the third quarter, following a sharp adjustment to the June offer, from N450 billion to N1 trillion.
While the stop rates increased across standard tenors, BroadStreet analysts said an upward repricing in the secondary half of 2026 is not impossible. However, they noted that there have been surprises at the Treasury bills auction, making it difficult to accurately predict how the authority will price rates.
