Nigerian T-Bills Yield Declines to 6.2%

Nigerian T-Bills Yield Declines to 6.2%

After Treasury bills refinancing by the Central Bank of Nigeria (CBN), trading activities in the secondary market switched to calm notes as traders announced that pockets of the transaction were consummated on Monday.

Spot rates crashed sharply at the primary market auction as demand for risk-free government securities spiked, though investors are earning negative yields on portfolios. 

In contrast, sustained bargain hunting in the equities market pushed the year to return to 20.87% versus 22.41% inflation rate.  The treasury bills market traded tepidly today with minimal demand seen across some maturities.

There was robust liquidity in the financial system as banks absconded from the CBN standing lending facility, and Treasury bills sales by local lenders decline, keeping yield movements steady.

On Monday, local investors were positioned at the far end of the Nigerian T-bills. As a result, the average yield slid marginally by as basis points to 6.2%.

In the money market, short-term benchmark rates dropped further due to solid liquidity levels in the financial system despite the fact that the primary market auction worth ₦187.11 billion was settled.  The open repo rate remained unchanged at 1.36%, while the overnight lending rate declined to 1.14% from 1.36%. 

In the bond space, the price of FGN bonds surged for most maturities, driven by buying interest in mid and long-dated bonds. Cowry Asset Management said this offset marginal losses across short-dated debts and resulted in a further contraction of the average secondary market yield to 12.45%.

Notably, the 21 JAN 2042 paper (richer by 105 bps) outperformed and led today’s gains, according to the investment firm.

Also, the 10-year and 20-year FGN Bond papers yielded around 12.64%, 10 basis points decline from 12.74% and 14.16% from 14.25%, respectively, while the 30-year paper held steady at 14.69%.

Elsewhere, the value of FGN Eurobonds closed lower across most maturities, driven by sustained bullish activity. Conversely, the average secondary market yield expanded to 12.98%. #Nigerian T-Bills Yield Declines to 6.2%

Nigerian Treasury Bills Yield Rises to 7%