Treasury Bills Yield Rises to 19.5% Ahead of Q2 Supply

Treasury Bills Yield Rises to 19.5% Ahead of Q2 Supply

With the bearish trade in the secondary market, the average yield on Nigerian Treasury bills rose by 11 basis points to settle at 19.6%, according to investors notes reviewed.

Trading activities at the Nigerian Treasury bills secondary market were bearish after the Islamic holiday. The sell down in naira assets lifted the yield curve across the belly and the long end of the curve, traders said.

Demand emerged later for the new 1-year paper (26 Mar 2025) and, to a lesser extent, the long-end Feb OMO bill, according to AIICO Capital Limited. The firm explained that trading volumes remained modest as participants capitalized on improved system liquidity.

Thin transactions were conducted on short dated Treasury bills papers, there was however profit takings activities on mid and long tenor bills in the secondary market as investors continue to reshuffle portfolio.

Demand for selected papers at the short and long ends of the curve was countered by selling pressure at the mid segment.  In a note, Cordros Capital Limited told investors that the average yield was flat at the short end, but expanded at the mid (+30bps) and long (+5bps) segments.

The yield expansion was driven by profit-taking activities on the 162-day to maturity (+91bps) and 232-day to maturity (+26bps) bills, respectively. 

Notably, the 8-Jan (-7bps) maturity saw the sharpest decline in yield, while the 4-Sep (+50bps) bill recorded the biggest jump, TrustBanc Financial Group Limited told investors in a note.

Similarly, the average yield expanded by 5bps to 24.3% in the OMO bills segment amidst slowdown in supply. The Central Bank has scaled back on OMO bills sales, conducted on main auction in February and March.

The authority is expected to begin second quarter auction sales after a strong mop up in the first quarter as liquidity level in the financial system surged to N1.5 trillion. Yield Slides on Post Auction Demand for Nigerian Treasury Bills