Investors Pile into Nigerian Treasury Bills, Yields Decline
The average yield on Nigerian Treasury bills declined by 9 basis points in the secondary market to 18.56% on investors’ accumulation ahead of the midweek auction.
Transactions in the Treasury bills market on Monday were broadly bullish, traders said in separate investor notes obtained by MarketForces Africa,
Treasury bill yields contracted across the short, belly, and long ends of the curve on renewed buying interest in naira assets ahead of the midweek auction with N700 billion in new supply.
Due to bargain hunting, yields declined by 6 basis points at the short end of the curve. At the belly of the curve, that is, those treasury bills that will expire in less than 182 days, yield declined by 18bps as a result of accumulation.
Investors’ buying interest in longer-duration assets dragged down yields at the long end of the curve by 6 bps. The key drivers of the yield contraction were buying interest in Nigerian Treasury bills that will expire on 03-SEP 2026, whose yields fell by 28 bps.
Demand for Treasury bills with 03-DEC 2026 expiration dragged its line down by 48 bps, and positioning in 17-DEC slashed its yield by 46bps.
The market also saw activity in treasury bills, with 03-JUN 2027 reducing its yield by 21 bps. Consequently, the average yield compressed by 9bps to 18.56%.
On Wednesday, the Central Bank of Nigeria (CBN) will open N700 billion in Treasury bills across standard tenors for investor subscription.
The CBN will put on the offer table 91-, 182-, and 364-day bills worth N100bn, N100bn, and N500bn for investors’ subscription, targeting N700bn across the three papers. Last week, average yields on treasury bills decreased by 6 bps week-on-week to 18.65% due to secondary-market demand.
The bullish sentiment was broad-based, as the short end (0–91 days), medium end (92–182 days), and long end (above 182 days) declined by 13bps, 11bps, and 11bps, respectively, to close at 16.34%, 17.94%, and 19.86%. CBN to Open N700bn in Treasury Bills for Subscription, Rates to Stay Elevated
