Nigeria Treasury Bills Yield Dips to 25.6% Ahead of Huge Offer
The average yield on Nigerian Treasury bills dipped to approximately 25.6% in the secondary market despite quite a trading session at the beginning of the New Year. Trading volumes remained low as most market participants have yet to resume activities for the year fully, according to fixed income market analysts’ notes.
Traders revealed that early activity focused on the recently issued 1-year Nigerian Treasury bills with limited offers meeting demand. While unmet bids at the final auction in December filtered into the secondary market, trading activity slowed on Monday following the Central Bank’s announcement of its final OMO auction for 2024, which diverted market attention.
Post-festive break, trading activity remained subdued, with investors primarily focusing on far-dated maturities, particularly December bills, according to TrustBanc Financial Group.
Toward the close of the trading sessions last week, activities were mostly concentrated on the long end, supported by improved interbank liquidity. The Debt Management Office is scheduled to offer about ₦515 billion at the Treasury bills auction, compared to about ₦74.406 billion maturing, AIICO Capital Limited said in a note.
Analysts also noted that the release of the Q1 Treasury bills auction calendar reignited buying interest, enabling the NTB segment to close the week on a positive note.
Notably, the 6-Mar maturity saw the steepest decline in yield, dropping by 80 bps as demand surged. The average benchmark yield closed the week at 25.57%. But yield increased by 3 bps to 27.2% in the OMO segment.
The CBN conducted an OMO auction on Monday, offering instruments worth N500.00 billion to investors. This was split into N250.00 billion for the 358-day OMO bills and N250.00 billion for the 365-day OMO bills.
Total subscription settled at N931.32 billion (bid-to-offer: 1.9x), with the CBN allotting exactly what was offered—N100.00 billion for the 358-day and N400.00 billion for the 365-day instruments.
“Based on our projection of still strong system liquidity in the coming week, we expect yields in the Treasury bills secondary market to trend lower,” fixed income market analysts at Cordros Capital Limited said. #Nigeria Treasury Bills Yield Dips to 25.6% Ahead of Huge Offer French Embassy to Empower 1,500 Youths on Agric. Dev’t in Kano
