Nigerian Treasury Bills Yields Soften as Investors Boost Positions
The fixed income market recorded a rush for Nigerian treasury bills on Thursday, following the monetary authority’s rejection of 60% of total subscriptions at the main auction on Wednesday.
Reacting to a slowdown in the inflation rate, fixed-income investors piled into positions amid excess liquidity in the financial system and still-elevated yield premia across naira-denominated instruments.
The buying action was fueled by investors who lost out on huge bids at the Treasury bills auction, now seeking to fill their portfolios via secondary market transactions.
The market recorded buying interest across the short and mid segments of the curve, with their associated yields contracting by 2bps.
The market began the day on an active note, as participants sought to take profit from the auction while unmet bids filtered into the secondary market.
The new 1-year bill that will mature on 15 July 2027, which drove market activity, commenced trading at an average yield of 17.35%, with quotes seen at 17.45% and 17.40%.
This was the short-term investment paper that the Central Bank sold to investors at 17.66%, 4 basis points lower than the 17.70% previously offered.
It was later seen in demand at 17.45%/17.35%, according to Herwood Capital Limited. Other bills, such as the 17 June 2027, also saw light activity, with quotes of 17.25% offered.
Consequently, the average yield declined by 1bp to 18.40%, CardinalStone Securities Limited told investors in a note. #Nigerian Treasury Bills Yields Soften as Investors Boost Positions
