Yield Spikes as Fund Managers Offload 364-Day Bills
Market price slumped as Asset, Fund Managers offloaded large bucket of long-dated Nigerian Treasury bills (NTB) in the secondary market on Thursday amidst unimpressive naira assets performance.
Accelerating headline inflation rate has eclipsed real return. In addition, a weak local currency position in the FX market has made investment in naira-denominated assets unimpressive.
But the asset managers said they have few options at the moment. It costs money to keep money, fund managers told MarketForces Africa in a chat, saying taking a position in the fixed income market would only reduce exposure to the inflation rate.
In the secondary market, trading activities closed on a bearish note, on the back of profit-taking on the 364-day paper – following downward spot rates re-pricing in the primary market auction conducted by the Central Bank of Nigeria.
The 364-day NTB yield jumped by 158 basis points to close at 10.39%, traders at TrustBanc Capital said in a market brief, saying trading was moderate on shorter-term bills, while others barely attracted portfolio investors.
As a result, the average benchmark yield jumped seven basis points higher to close at 6.84%. “We expect a similar trend in the closing session for the week”, the investment firm stated.
Across the curve, the average yield closed flat at the short and mid segments but declined at the long (-5bps) end as participants demanded the 329-day to maturity, losing 273 bps basis points. #Yield Spikes as Fund Managers Offload 364-Day Bills
