Nigerian T-Bills Yield Prints at 4%

Nigerian T-Bills Yield Prints at 4%

The average yield on Nigerian Treasury bills (NTB) slumped by four basis points to 4% in the secondary market following a buying interest registered last week after the apex bank refinanced matured bills.

The yield on T-bill has nosedived significantly since late last year due to healthy liquidity in the financial system, forcing investors to lock in funds into naira assets amidst rising inflation rate in the country.

Reversing the previous trend in January, inflation rate surged to 21.82% while the Nigerian naira faced pressures emanating from foreign currency scarcity. These portend strong downside to asset managers’ portfolio construction- with widening real return.   

However, with a solid liquidity profile in the financial system, and a dearth of alternative investment options, the fixed income market continues to rally – although the real return on assets remains negative.

Last week, the Central Bank of Nigeria conducted a primary market auction where the monetary authority offered market participants instruments worth N263.50 billion.  The total sum was split as N11.68 billion for the 91-day, N10.21 billion for the 182-day, and N241.61 billion for the 364-day bills, according to analysts’ notes.

Demand at the auction came lower than the previous auctions in 2023, as the total subscription settled at N296.75 billion. Eventually, the CBN allotted exactly what was offered

CBN auction result indicated that the stop rate for the 91-day bill rose to 3.00% from 0.10%. Also, the 182-day bill increased to 3.24% from 0.30% while 364-day bill jumped to 9.90% from 2.24%.

Across the market segments, the average yield declined by 4 basis points but was flat at 3.8% in the OMO market segment.  Traders said OMO bills worth N70 billion matured.

Also, there was an inflow of N380.22 billion in the financial system, as well as an inflow from the federal account allocation committee (FAAC) disbursement for January worth N750.17 billion. #Nigerian T-Bills Yield Prints at 4%

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