Yield on Nigerian Treasury Bills Falls to 20%
As demand increased, the average yield on Nigerian Treasury bills fell slightly in the secondary market to settle at 20%, analysts said in their separate investors’ notes. Demand for naira assets continued to gain steam as the benchmark interest rate surpassed the inflation rate, with investors capitalizing on real returns in the financial markets.
Fixed-interest securities asset holders are capitalizing on positive real returns in the debt market to increase their portfolios amidst the market’s expectation of a policy shift. A slew of fixed income analysts have predicted that yield will drop further in the first quarter of 2025.
The market traded bullish despite a heavy deficit in the financial system ahead of the FGN bond settlement. With buying interest across short, belly, and long durations, yields on Treasury bills dropped marginally ahead of the next primary market auction.
The long-end bills, especially the January and February maturities, attracted the most interest. Limited offers were observed as some players aimed to capitalize on market levels, resulting in only a few trades being executed.
Hence, the average yield is lower by 3 bps to 20.0%. Across the curve, the average yield declined at the short (-1bp), mid (-1bp), and long (-5bps) segments, Cordros Capital Limited said in a note.
The contraction in yield was driven by demand for the 86-day to maturity (-1bp), 177-day to maturity (-1bp), and 331-day to maturity (-49bps) bills, respectively. Similarly, the average yield declined by 230 bps to 22.6% in the OMO segment. CBN Rejects N1.6trn from Investors, Cuts Treasury Bills Rates
