Treasury Bills Yield Climbs as Investors Unload Naira Asset

The average yield on Nigerian Treasury bills climbed by 47 basis points (bps) due to fresh selloffs ahead of the Central Bank (CBN) primary market auction (PMA) for the week.

Apex Bank will be refinancing maturing bills to continue its watch on the liquidity position in the economy. Meanwhile, pressure on funding rates in the money market eased as a result of healthy inflows from FGN bond coupon payments worth N166.48 billion.

This amount saturated tight liquidity in the market, forcing short-term benchmark interest rates to decline. Data from the FMDQ platform showed that the overnight lending rate contracted by 225 basis points to close at 21.0% – in the absence of significant funding pressures.

Key money market rates, including the open repo rate (OPR) and overnight lending rate (OVN), nosedived and concluded at 19.95% and 21.00%, respectively, Cowry Asset Limited said in an update.

With these, the proceedings in the Treasury bills secondary market were bearish due to fresh risk-off sentiment. The selloffs impacted the yield curve as the average yield expanded by 47 basis points to 3.9%.  NGX Crosses N52Trn as Dangote Cement Rallies

In its market update, Cordros Capital Limited said across the curve, the average yield advanced at the short (+2bps) and long (+94bps) ends. This was driven by profit-taking activities in the 31-day to maturity (+14bps) and 234-day to maturity (+713bps) bills, respectively.

Meanwhile, the average yield was flat at the mid-segment. Elsewhere, the average yield declined marginally by 1bp to 8.4% in the OMO bill segment. Trading in the FGN bonds secondary market closed on a bullish note, as the average yield pared by 1bp to 13.5%.

Across the benchmark curve, traders said the average yield expanded at the short (+13bps) end as investors sold off the MAR-2027 (+79bps) bond. Meanwhile, yield contracted at the long (-9bps) end following demand for the JUN-2053 (-32bps) bond. Conversely, the average yield closed flat at the mid-segment. #Nigerian Treasury Bills Yield Climbs Ahead of CBN Auction