Treasury Bills Yield Hovers at 19% Ahead of Auction
The average yield on Nigerian Treasury bills hovered around 19% in the secondary market due to mild buying interest ahead of the midweek auction. While trading activities were generally on calmer note, it had a bullish undertone as some investors picked bet across the short, belly and long end of the curve.
Hence, the average yield retreated by 1 basis point to close at 18.98% in the secondary market. Across the curve, the average yield declined at the mid (-3 bps) segment, driven by demand for the 164-day to maturity (-3 bps) bill.
However, the yield closed flat at the short and long ends. Similarly, the average yield declined by 3 bps to 22.4% in the OMO segment. On Monday, the Nigerian Interbank Treasury Bills True Yield (NITTY) recorded gains across all tenors.
In a note, TrustBanc Financial Group reported that the 5-Feb (-4bps) maturity saw the sharpest decline in yield, while the 4-Dec (+36bps) bill recorded the biggest jump. The Central Bank of Nigeria (CBN) will be conducting a primary market auction on Wednesday as part of liquidity management efforts with the expectation of further spot rate price down.
The Treasury bills market trend both ways in February, with investor activity largely influenced by liquidity conditions, auction results, and macroeconomic data. The month began with subdued trading as investors cautiously engaged in longer-tenor papers, AIICO Capital Limited said in an investors note.
However, mid-month liquidity-driven demand surged, particularly for December and January maturities, following a strong Nigerian Treasury bills auction, analysts said.
Recalled that the CBN offered ₦670 billion worth of Treasury bills to investors at the main auction against ₦955.37 billion in maturities. The offer attracted ₦3.218 trillion in subscriptions on the back of investors’ strong appetite.
Stop rates for the 1-year tenor fell to 20.32% from 21.80%. AIICO Capital Limited reported that as the month progressed, a significant drop in inflation data to 24.48% from 34.80% triggered a bullish rally, leading to rate declines.
The Treasury bills auction that followed saw heightened demand, with stop rates for 91-day, 182-day, and 364-day papers falling to 17.00%, 18.00%, and 18.43%, respectively.
Strong buying interest persisted for January and February 2026 papers, albeit with limited offers restricting trade volumes. By month-end, sustained demand and robust auction participation contributed to a 3.53% decline in the average mid-yield across benchmark Nigerian Treasury bills papers, closing at 19.78%.
Analysts maintained that market sentiment remained stable, with selective trades driving further rate compression. #Treasury Bills Yield Hovers at 19% Ahead of Auction Ministry Seeks $2 billion Fibre Optics Funding
