Nigerian Treasury Bill Yield Drops to 19.4% Ahead of Auction
The average yield on Nigerian Treasury bill (NTB) shrank by 46 basis points to 19.4% in the secondary market due to rising demand from fixed interest income investors. Investors were seen accumulating Treasury bill papers at the long (-89 bps) and mid (-21 bps) segments, causing average yields to trend lower to settle at 19.43%.
In a note, analysts at Cordros Capital Limited report that the average yield contracted across the curve. At the short end, yield eased by a basis point due to demand for Nigerian Treasury bills maturing in 79 days.
At the belly of the curve, yield dropped by 21 basis points as investors ramped up Nigerian Treasury bills maturing in 170 days. At the long end, yield also fell over demand, down by 182 basis points on the back of bargain hunting in 184 day to maturity. Nigerian Treasury bills
Reflecting the development in the fixed income market, the average yield on Nigerian OMO bills contracted by 62 bps to 25.1% in the secondary market.
On behalf of the Central Bank of Nigeria, the Debt Management Office (DMO) plans to auction ₦250 billion across the 91-, 182-, and 364-day papers. Analysts said they expect cautious sentiment in the secondary market as players await auction results.
The Treasury bills secondary market closed bullish with average yields across the Nigerian Treasury Bills (NTB) and Open Market Operations (OMO) segment declining by 50 bps to close at 22.82% at the beginning of the week.
The yield contraction was driven by buying interest, particularly in the OMO bills segment, with average yields declining by 71 bps to 25.70% per annum. However, the NTB market also experienced demand across the curve, with average yields contracting by 30 bps to close at 19.93% per annum.
In a note, fixed income market analysts at Coronation Research said they expect the improved system liquidity this week to drive market interest, thereby leading to a further decline in yields. #Nigerian Treasury Bill Yield Drops to 19.4% Ahead of Auction Nigerian Stock Market Soars as Investors Gain N226bn
