Sell Pressure Kicks Yield on Nigerian Treasury Bills to 26%
The average yield on Nigerian Treasury bills continued to increase due to selling party in the secondary market, fixed interest securities traders said in their market updates.
Investors are exiting their positions as uncertainties in the economy persist, while some companies are unloading investment securities as naira devaluation purged their respective earnings.
Fixed income securities analysts said in their respective market updates that trading activities in Treasury bills secondary market ended on a bearish note again yesterday.
Due to selloffs, the average yield expanded by 4 basis points to 25.8%. Cordros Capital Limited told investors that, across the curve, the average yield pared at the short (-1bp) and mid (-1bp) segments.
Traders attributed the yield contraction to mild interest in the 79-day to maturity, which lost -1bp in its yield figure. There was also buying interest in 170-day to maturity, causing yield as belly of the curve to inch lower by -2bps.
Meanwhile, the average yield advanced at the long (+9 bps) end, following sell pressures on the 212-day to maturity, pushing its yield upward by 93 bps. Elsewhere, the average yield contracted by 3 basis points to 25.7% in the OMO bills segment in the secondary market.
In July, the treasury bills market decreased in price due to limited liquidity and a higher benchmark interest rate set by the monetary policy committee of the Central Bank, AIICO Capital Limited, said in a note.
Despite some buying interest in a few bills, there were no sales at the first and second Open Market Operations (OMO) auctions. Also, two Nigerian Treasury Bills (NTB) auctions were conducted during the month, with stop rates rising for different maturities.
The Debt Management Office also issued new T-Bills worth approximately ₦41.17 billion. Overall, the market remained bearish, with the average mid-rate increasing by 266 basis points month on month to 23.13% by the end of the month, according to AIICO Capital Limited.
“In August, the bearish outlook is anticipated to continue, albeit with less intensity, as the government faces challenges in managing the high borrowing costs”, the investment firm said in a note. # Sell Pressure Kicks Yield on Nigerian Treasury Bills to 26% Amusan Leads into Women’s 100m Hurdles Semi-finals
