Risk-off Sentiment Shifts Yields on Nigerian Treasury Bills
Reflecting risk-off sentiment in the debt market, the average yield on Nigerian Treasury bills rose 15 basis points in the secondary market as investors trimmed their holdings.
Traders reported that the average yield on Nigerian Treasury bills across the short, belly and long ends of the naira curve increased to 17.61%, staying ahead of the inflation rate.
Investment analysts reported that the increase in average yield was due to selling pressure in the longer-dated instruments, including Feb-27s (+121bps and +85bps), Dec-26 (+92bps), and Jan-27 (+54bps).
There were also selloffs in selected maturities in the middle of the curve, such as Aug-26 (+40bps) and Jul-26 (+25bps). Meanwhile, other instruments across the curve saw yield moderation between 2bps and 3bps, save for the May-26 (-26bpsa), which saw the most pronounced demand pressure.
The fixed income market wrapped up the last week on a broadly bearish note, with a significant wave of selling concentrated on FGN bonds and Nigerian Treasury Bills, as investors repositioned ahead of more compelling rates in the primary market.
Despite mixed sentiments towards Treasury Bills, there is a clear opportunity for investors; the average yield on Nigerian Treasury Bills rose 23 basis points week-on-week to 17.46% per annum.
Fixed-income investors offload their existing holdings and capitalise on attractive rates in the forthcoming primary auction, positioning themselves for potential gains. CBN Hikes Rate on 364-Day Treasury Bill to 16.73%
