T-Bill Yield Falls Below 23% as Unmet Bids Boost Demand
The average yield on Nigerian Treasury bills receded below 23% due to increased demand for naira assets in the secondary market from 23.10% after the primary market auction on Wednesday. According to fixed income analysts, the latest rally in the Treasury bills market was spurred by unmet bids at the primary market auction conducted during the week.
Fund, asset managers move to fill gaps in their respective portfolios, causing yields to swing, with the average yield contracting by 20 basis points to 22.8% on Thursday in the secondary market. Across the curve, the average yield declined at the short (-17 bps), mid (-28 bps), and long (-16 bps) segments in the market, according to Cordros Capital Limited.
The Nigerian Treasury bills yield decline was attributed to buying interest on the 91-day to maturity bills, whose yield declined by -112 bps. As a result of market demand for 105-day-to-maturity bills, its yield curve sloped downward by -89 bps, while buying interest on 196-day-to-maturity bills dragged its yield lower by 84 bps.
Similarly, the average yield dipped by 45bps to 25.3% in the OMO bills segment in the secondary market due to increasing demand after failed primary market auctions attempted last month.
The Central Bank of Nigeria (CBN) held a Treasury Bills (T-Bills) Primary Market Auction (PMA) on the 21st of August, 2024. At the PMA, existing Treasury Bills totalling N409.98 billion across standard maturities were offered to investors for subscription.
The amount was split into three maturities across the 91-day (N60.69 billion), 182-day (N66.25 billion), and 364-day (N283.04 billion) maturities that matured and were rolled over. #T-Bill Yield Falls Below 23% as Unmet Bids Boost Demand FX Stability: CBN Sells 122.671m Dollars to 46 Authorised Dealers
