Nigeria Bonds, Treasury Bills Yields Collide at 17.2%
The average yield on Federal Government Bonds and Treasury bills settle at 17.2% following recent yield inversion in the debt capital market, reflecting new conditions in the fixed income space. The rate collided ahead of the Treasury bills auction for the week.
In the money market, short-term interest rates came under heat due to a liquidity squeeze that followed large primary market OMO bills auction sales last week. The market had shaken off large debits for the T-Bill auction early in the week when funding rates declined.
According to data from FMDQ, the overnight lending rate expanded by 155 basis points to 29.04%, in the absence of any significant funds flows into the system. The open repo rate (OPR) rate increased by 1.33% to 28.21%.
The Treasury bills secondary market traded with mixed sentiments but with a bullish bias, as the average yield pared by a basis point to 17.2%., Cordros Capital Limited told investors via email.
Traders said across the curve, the average yield was flat at the short end but declined at the mid (-1bp) and long (-1bp) segments. It was noted that fixed-income investors in the market demanded the 170-day to maturity dragged yield lower by one basis point.
Market participants’ buying interest in 338 days to maturity resulted in a basis point reduction in its yield Similarly, the average yield pared by 1bp to 17.9% in the OMO bill segment in the secondary market after the CBN sold N1 trillion at the primary market on Friday.
Elsewhere, the Nigerian bonds secondary market traded with bearish sentiments, as the average yield expanded by 7 basis points to 17.2%, Cordros Capital Limited told investors.
Traders started that across the benchmark curve, the average yield increased at the short (+25bps) end following the sell-off of the MAR-2024 (+147bps) bond but closed flat at the mid and long segments. #Nigeria Bonds, Treasury Bills Yields Collide at 17.2%
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