Treasury Bills Sold Off as Investors Rotate Funds to Risky Assets
The average yield on Nigerian Treasury bills (NTB) climbed by 12 basis points (bps) in the secondary market on Wednesday as investors sold off naira assets.
The market witnessed a sell-off across the short and belly of the curve as capital rotated into riskier equities on the back of a negative inflation outlook.
A sustained surge in inflation has reduced the real return on investment in the fixed-income market, though yields remain elevated due to monetary policy tightening that has kept interest rates at double-digit levels.
The authority increased spot rates on treasury bills at last week’s primary market auction to reflect market dynamics. Investors are demanding higher returns on investment, while Apex Bank maintained focus at scaling back its balance sheet costs.
Traders reported bearish activity across the long (+20bps), mid (+5bps), and short (+4bps) segments of the curve. Consequently, the average yield inched up by 12bps to settle at 17.66%, pointing to softening investor demand and a broadly negative tone across the fixed-income space.
