Yield on Inflation Exposed Treasury Bills Dips 20 Basis Points
The average yield on the Nigerian Inflation Exposed Treasury bills traded in the secondary market on Wednesday dips 20 basis points amidst improve financial system liquidity.
Robust system liquidity seen today again keeps rates on short-term borrowings lower in the money market with 50 basis points decline in average interbank rate to 14.75 per cent.
A persistent slowdown in headline inflation rate has narrowed negative real return on fixed interest securities, with the possibility of further decline on the table.
Analysts are expecting the headline inflation rate to slow down in October, and harvest season at the latter part of the year would likely tame the food index.
In the money market, the slowdown in the interbank rate came following 50 basis points decrease in the Open Buy Back rate (OBB) and Overnight rate to close at 14.50 per cent and 15.00 per cent, respectively.
Activities at the Nigerian Treasury Bills secondary market traded on a bullish note in today’s session following declines of 23 and 29 basis points in the mid and long ends of the curve, respectively, according to a market report from Alpha Morgan Capital.
Consequently, the average yield dipped by 20 basis points to close at 5.00 per cent at mid-week from 5.2 per cent.
Across the benchmark curve, analysts at Cordros Capital hinted that the average yield was flat at the short and mid segments but contracted at the long (-44bps) end due to demand for the 232 day-to-maturity (-130bps) bill.
Elsewhere, the average yield at the open market operations (OMO) segment was flat at 6.4 per cent as naira appreciated by 0.2per cent to N414.07 per dollar at the investors and exporters foreign exchange window, data from the FMDQ Exchange platform shows.
Similarly, activities at the Federal Government of Nigeria bond secondary market recorded a mixed outturn in today’s session, albeit, with a bearish undertone.
Market data from analysts show there was a basis point drop at both the short and long ends of the curve while the mid-end of the curve climbed by 3 basis points. As a result, the average yield remained flat to close at 11.34 per cent.
“Across the benchmark curve, the average yield expanded at the short (+3bps) end following sell-off of the MAR-2027 (+23bps) bond but was flat at the mid and long segments”
In the Eurobond market, trading activities was somewhat of a bearish note following expansions across all instruments except the Nov-2027 instrument that dropped slightly by a basis point. In sum, the average yield climbed by 2 basis points to close at 6.44 per cent. #Yield on Inflation Exposed Treasury Bills Dips 20 Basis Points
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