Nigerian Treasury Bill Yield Moderated to 20%

Nigerian Treasury Bill Yield Moderated to 20%

The average yield on Nigerian Treasury bill has dropped further at the beginning of the week to close at 20%.  The yield contraction follows the apex bank reduce spot rates across standard maturities sold to investors at the primary market auction.

The Debt Management Office (DMO) that conducted the auction on behalf of the Central Bank of Nigeria (CBN) slashed the rate as investors staked huge bets on the local borrowing assets. Both Treasury bills and OMO auctions conducted were relatively oversubscribed despite the tight liquidity level in the financial system.

The bullish sentiment was brought forward into the new week, caused the average yield to shrank by two basis points on Monday.  The average yield increased at the short (+6bps) and long (+10bps) ends, according to Cordros Capital Limited.

The shift in the yield line was driven by profit-taking on the 73-day to maturity and 290-day to maturity bills, respectively.

Meanwhile, the average yield declined by 31bps in the mid segment due to strong demand for the 94-day to maturity (-52bps) bill.  Similarly, the average yield declined by 1bp to 23.3% in the OMO bills segment in the secondary market.

In the money market, Nigerian interbank rate rose across all tenors as money market conditions tightened, with banks holding liquidity seeking to capitalize on higher rates.

However, key money market rates such as the Open Repo Rate (OPR) and Overnight Lending Rate (O/N) decline #Nigerian Treasury Bill Yield Moderated to 20% Banks Stocks Face Selloffs, NGX Sees Intraday Loss