Nigerian Treasury Bills Rally on Investors Sentiment, Yields Stutter
The Nigerian Treasury bills rallied as investors sought to fill unmet bids at the Central Bank auction. At the primary market auction conducted on Wednesday, the authority sold less than bids received, though allotted some than initial offering to investors.
The trading direction kept yield movement on Nigerian bills in check after spot rates hike at the just concluded auction sales. With the buying moment experience in the market, the average yield contracted.
In a note, Cordros Capital Limited told investors that the average yield declined at the short (-1bp), mid (-4bps), and long (-2bps) segments. Analysts attribute the yield contraction to investors interest in the 77-day to maturity (-1bp), 154-day to maturity (-21bps), and 350-day to maturity (-2bps).
Some fixed income analysts noted that post-auction activities improved despite liquidity constraints limiting trading volumes. Market participants showed interest in selected maturities, cherry-picking at attractive levels, particularly at the mid to long ends of the curve, TrustBanc Capital Limited said.
Analysts noted that 10-Apr maturity recorded the sharpest decline in yield, dropping by 21bps, while modest bids were seen for the newly issued 364-day paper, with the secondary market yield easing to around 22% levels on the day.
Overall, the average benchmark yield declined by 4bps, closing at 24.26%. Investment analysts also said they expect the prevailing market sentiment to persist as liquidity conditions remain tight and investors digest signals from the auction.
Also, fixed income analysts said there was also some interest in the long-term OMO papers. The buying interest dragged the average yield lower by 2bps to 26.4% in the OMO segment.#Nigerian Treasury Bills Rally on Investors Sentiment, Yields Stutter#
