Treasury Bills Yields Dip as Investors Scramble for New Market Issue
Nigerian Treasury bill yields slipped as investors moved newly issued papers into the secondary market following more than N2.4 trillion in subscription rejections at the midweek auction.
The naira asset continues to attract risk-averse portfolio investors due to elevated yields deriving from the country’s high inflation and interest rate environment.
Trading activity was mildly positive, with yields contracting slightly across each segment of the curve as investors bolstered holdings.
Fixed income market analysts reported strong demand for the newly issued 29 Jul Treasury bills as investors redirected unmet auction demand into the secondary market.
Hence, the 29 Jul Treasury bills yield declined to 17.00%, while the average benchmark discount rate remained unchanged at 16.66%, according to AIICO Capital Limited,
At the midweek auction, demand was relatively stronger for 364-day treasury bills, which afforded the authority the opportunity to reprice its discount rate.
Total subscriptions printed at ₦3.62 trillion against an offer size of ₦700 billion, while the Debt Management Office (DMO) ultimately allotted ₦1.25 trillion.
Following the auction, the newly issued 29 Jul 2027 Treasury bills commenced trading at 17.20%/17.05%, with trades executed at 17.10%, 17.07%, and 17.02%, Herwood Capital Limited said in a note.
The investment firm said the Treasury bill later closed the day at 17.10%/17.05%. Consequently, the average yield compressed by 1bp to 18.15%. Interbank Rates Diverge as Financial System Liquidity Declines
