Yield Slides as Investors Increase Bets on OMO Bills
Investors increased bets on Nigerian OMO bills in the secondary market amidst rising interest rates on Naira assets. Traders, however, noted that buying momentum on Treasury bills eased due to attention shifting market dynamics as investors continued to optimise their portfolios.
Inflation is expected to recede further and the Nigerian authority is targeting strong economic growth with target to push GDP to $1 trillion.
Generally, the financial markets have become quite attractive for the money bags, the high net worth individuals with interest in debt securities due to elevated yield.
Meanwhile, trading activities in the Treasury bills secondary market was quiet as the average yield closed flat at 21.9%. There was little buying interest in the 25-Sep-2025 paper, although sellers offered the 27-Mar-2025 bill.
In a note, Cordros Capital Limited reported that across the curve, the average yield on Treasury bills papers declined at the short (-3 bps) and long (-4 bps) ends of the curves.
The yield contraction was attributed to demand for the 73-day to maturity bills which shed -4bps. Investors also took position in 339-day to maturity, with yield dipping by -4bps.
Fixed interest securities analysts said in their separate notes that average yield increased at the mid (+9 bps) segment due to selloffs of the 178-day to maturity (+89 bps) bill.
Elsewhere, the average yield declined by 5 bps to 23.6% in the OMO segment due to increased demand for the papers. #Yield Slides as Investors Increase Bets on OMO Bills CBN Defends Naira with $39m in Forex Market
