Yield on Nigerian Treasury Bills Crosses 21% Ahead of Auction
The average yield on Nigerian Treasury bills crossed 21% as investors continue to reduce the naira holdings in the secondary market. Trading activity was active ahead of a potential treasury bills auction.
The market saw offers prevail at the long end (+18bps) and mid segment (+17bps) of the curve, causing the average yield to increase by 8 basis points (bps) to reach 21.13%, investment firm CardinalStone Limited told investors in an emailed note.
The secondary market for Treasury instruments commenced the week with mixed sentiment—with foreign portfolio investors rotating out while locals are relatively bullish.
Notably, yields on the 4-Sep and 8-Jan papers rose by 20 bps and 132 bps, respectively, while the 26-Mar bill traded within a wide bid-offer range of 19.60/19.10, according to TrustBanc Financial Group Limited.
As a result, the average benchmark yield advanced, and fixed-income analysts said they expect the prevailing market conditions to persist in the coming sessions.
Traders also reported buying interest, where investors targeted attractive yields at the long end – particularly 5-Feb and 26-Mar tenors – against a backdrop of strong system liquidity.
Across the curve, the average yield declined at the short (-2 bps) end following the demand for 73-day to maturity (-3 bps) but expanded at the mid (+20 bps) and long (+25bps) segments.
The yield swing was due to the selloff of the 164-day to maturity (+39bps), and 269-day to maturity (+132bps) bills, respectively. Conversely, the average yield declined by 10 bps to 29.2% in the OMO bills segment. MTN Nigeria Net Loss Grows by 192% to N400 billion
