Yields on Naira Assets Steady as Liquidity Dries

Yields on Naira Assets Steady as Liquidity Dries

The average yield on Nigerian Treasury bills was steady at the secondary market yesterday due to thin, cold trading activities by fixed income securities investors. A similar yield movement was seen in the OMO bills segment.

At the close of the trading session, yield settled at 7.3% as investors continued to optimise portfolio return amidst racing headline inflation and a relatively higher interest rates environment.

Elsewhere, the average yield was flat at 3.0% in the OMO segment while the funding profile or liquidity level tightened further.

In its market update, Cowry Asset Management said the Nigeria Inter-Bank Offered Rate (NIBOR) witnessed upward movement across all maturities due to tight liquidity conditions stemming from funding pressure from the bond auction.

Key money market rates adjusted upward in the absence of significant inflows from maturing instruments apart from recent debit for FGN auction sales.  In their market reports, analysts and traders reported that the three-month NIBOR rate saw a notable increase of 187 basis points, reaching 15.00%.

Data from FMDQ showed that the open repo rate (OPR) and the overnight lending rate (OVN), also experienced slight upticks to 21.42% (up from 19.06%) and 21.40% (up from 19.64%), respectively.  The Nigerian Interbank Treasury Bill’s True Yield inched lower for most tracked tenors, even as the average secondary market yield on T-bills closed lower at 7.30%.

Proceedings in the FGN bond secondary market were bearish as the average yield advanced by 5 basis points to close the day at 13.8%. Cordros Capital said across the benchmark curve, the average yield expanded at the short (+2bp), mid (+11bps), and long (+5bps) segments, following profit-taking activities on the MAR-2026 (+9bps), APR-2029 (+28bps) and APR-2037 (+29bps) bonds, respectively.

Notably, the 10-year borrowing cost yielded around 13.79% (from 13.63%), while the 20-year note saw a yield of 15.19% (from 14.90%). The 30-year debt remained steady at 15.30%.  Also, FGN Eurobonds saw appreciation across tracked maturities, driving the average secondary market yield lower to 11.16%. #Yields on Naira Assets Steady as Liquidity Dries Naira Steadies as Banks Issue Update on FX Purchase