Investors See Moderate Decline in Treasury Bills Yield
As investors seek better returns that reduce funds exposure to inflation pressures, the Nigerian fixed income market remains unimpressive as yields slide further on Wednesday amidst stability in the financial system liquidity.
The better-positioned system liquidity keeps short term rates on a downward trend from the beginning of the week after a moderate pressure seen last weekend.
As such, interbank rates decline, according to data from the FMDQ platform with open buy back (OBB) dropped off 350 basis points today to close at 9.5%.
Similarly, the overnight lending rate contracted by 300 basis points to 10.75%, following N407.71 billion inflows from federal account allocation committee (FAAC) disbursements.
In the secondary market, the Nigerian Treasury bills closed with bullish sentiments, as the average yield contracted by 28 basis points to 5.3%.
Across the benchmark curve, Cordros Capital said in a market report that average yield contracted at the mid-segment recording 79 basis points drop and a 4 basis points slide in the long segment.
This occurred following investors’ demand for the 183-day to maturity (-126bps) and 211-day to maturity (-56bps) bills, respectively; the short end closed flat.
Elsewhere, analysts noted that the average yield at the open market operations (OMO) segment expanded by 3 basis points to close at 6.3% amidst declining issuance in the segment.
Analysts also reported that trading in the bond secondary market was mixed, albeit with a bullish tilt, as the average yield tightened by 3 basis points to 11.1%.
Across the benchmark curve, average yield slowdown was seen at the short (-8 basis points) end due to investors’ demand for the JAN-2022 (-38bps) bond but stayed flat at the mid and long segments.
In the foreign exchange market, the Nigerian local currency, naira lose against the United States dollar at the Investors and exporters FX window.
Read Also: Treasury Yield Falls as CBN Committee Discusses Policy Rates
Naira depreciates 0.1 per cent against the dollar at investors window to N414.73 as the volume transacted dropped. In the parallel market, naira hits a record low of N575 against the dollar.
Investors See Moderate Decline in Treasury Bills Yield
