Treasury Bills Yield Prints at 6.9% Ahead of Auction

Treasury Bills Yield Prints at 6.9% Ahead of Auction

The average yield on Nigerian Treasury bills (NTB) steadied at 6.9% in the secondary market on Monday ahead of the Central Bank of Nigeria (CBN) scheduled primary market (PMA) auction.

At the auction, the CBN would roll over maturity Nigerian Treasury Bills worth N108.13 billion across the 91-day, 182-day and 364-day tenors. Some traders have revealed an expectation that subscription levels will come strong on account of healthy liquidity in the financial system.

Speaking to swings in money market rates, analysts explained that short-term benchmark rates declined, staying in the single-digit region. Data from the FMDQ showed that the overnight lending rate contracted by 30 basis points at the beginning of the week to 2.5%.

The decline reported was a result of the absence of any significant pressures on funding rates, which impacted transaction direction in the secondary market for Nigerian Treasury instruments.

According to Cordros Capital analysts’ notes, trading activities on the Nigerian Treasury bills ended cold on Monday as investors continue to search for higher returns on investment.

Consequent to a pocket of transactions record, the average yield was unchanged at 6.9%. Across the curve, traders at Cordros Capital Limited reported that the average yield closed flat at the short and mid segments. However, yield contracted at the long (-1bp) end following mild interest in the 339-day to maturity (-1bp) bill.

Elsewhere, the average yield declined by a basis points to 12.1% in the OMO segment, traders said. In the bond segment, trading activities were mixed albeit with a bullish bias.

Fixed interest securities traders reported that the average yield pared by 1bp to 14.4%. Across the benchmark curve, the average yield contracted at the short (-6bps) end.

The market witnessed investors demand for MAR-2024 (-26bps) bond. However, yield expanded at the long (+1bp) end following profit-taking on the JUN-2053 (+8bps) bond. Meanwhile, the average yield was unchanged at the mid-segment.

Last week, yields in the secondary market experienced a decline for most maturities. as investors continue to search for higher returns on their investments to compensate for inflation surge

Fixed income securities traders anticipate that yields in the secondary market will stay relatively calm this week as the market ahead of the forthcoming Treasury Bills Primary Market Auction. #Treasury Bills Yield Prints at 6.9% Ahead of Auction Nigeria Eurobond Slumps after CBN Resumes OMO Auction