T-Bills Yield Rises, Bond Tracks Lower as Naira Sinks

T-Bills Yield Rises, Bond Tracks Lower as Naira Sinks

The average yield on fixed income securities closed mixed midweek in the secondary market while the Nigerian local currency, the naira, falls. The naira depreciated by 0.1% to N420.50 per the United States dollar at the Investors and Exporters foreign exchange window.

The official window has continued to witness pressures due to low dollar inflows despite N65 rebates paid to Exporters.

In the money market, short-term rates inched upward amidst a liquidity squeeze in the financial system, according to data from FMDQ Exchange. In its market report, Cordros Capital said the overnight lending rate expanded by 13 basis points to 14.1%, following outflows for the FGN bond auction worth N226.13 billion.

Today, the Nigerian Treasury bills secondary market traded with bearish sentiments, as the average yield expanded by 3 basis points to 4.7% amidst a high headline inflation rate. Investors traded exits on Treasury instruments as yield repricing appears to have slowdown after 150 basis points increase in benchmark interest rate to 13%.

Across the curve, traders said in the note that the average yield expanded at the short (+4bps) and mid (+4bps) segments as participants sold off the 64-day to maturity (+26bps) and 115-day to maturity (+15bps) bills, respectively.

But, the yield was flat at the long end. Similarly, the average yield expanded by 12 basis points to 5.2% in the open market operations (OMO bills) segment. In the bond segment, trading activities ended on a bullish note in the secondary market. Cordros capital said the average yield dipped by 6 basis points to 11.1% midweek.

Across the benchmark curve, traders stated the average yield contracted at the short (-6bps), mid (-4bps), and long (-7bps) segments, following buying interests on the MAR-2024 (-15bps), APR-2032 (-7bps), and MAR-2050 (-13bps) bonds, respectively. # T-Bills Yield Rises, Bond Tracks Lower as Naira Sinks