Nigerian T-Bills Yield Rises by 22bps to 9%
The average yield on Nigerian Treasury bills climbed by 22 basis points to close at 9.2% as risk-off sentiment persisted in the secondary market. Uncertainties in the economy spooked reactions following the apex bank’s move to curb FX games by Nigerian banks.
The financial market has been swinging both ways as investors began to weigh various economic policies’ effects on their portfolios. Inflation and interest rates are projected to climb. Already, the Central Bank of Nigeria (CBN) has increased spot rates across T-bills instruments, hoping to attract foreign investors amidst the US dollar shortage. OMO bills have been priced higher but FX inflows remained depressed.
In the secondary market, debt capital market investors’ mood was altered. Sentiments in the T-bills secondary market remained bearish, as the average yield advanced by 22bps to 9.2%.
Across the curve, Cordros Capital reported that the average yield expanded at the short (+27bps) and long (+31bps) ends. Fixed interest securities investors sold off the 36-day to maturity (+244bps) and 295-day to maturity (+197bps) bills, respectively.
Meanwhile, the average yield closed flat at the mid-segment as result of a thin transactions. Elsewhere, the average yield remained at 9.6% in the OMO bills secondary market segment. Banks Face Risks over 24hrs FX Positions Sell Down
Similarly, the FGN bonds secondary market traded on a bearish note, as the average yield increased by 37bps to 14.4%. Across the benchmark curve, traders said the average yield advanced across the short (+56bps), mid (+51bps) and long (+21bps) segments.
The surge was due to sell pressures on the MAR-2024 (+219bps), JUL-2030 (+95bps) and JUN-2038 (+107bps) bonds, respectively. In the money market, NIBOR rose across the board for all maturities tracked, reflecting tight money market conditions. The money market short-term benchmark interest rates surged following the debits for the January 2024 FGN bond PMA worth N418.20 billion.
Data from the FMDQ platform confirmed that key money market rates, such as the open repo rate (OPR) and overnight lending rate (OVN) surged to conclude at 19.35% and 20.40%, respectively. #Nigerian T-Bills Yield Rises by 22bps to 9%
