In the midst of widespread protest, there was persistent negative trading on naira assets, which was caused by a risk-off attitude. As a result, the average yield on Nigerian Treasury bills increased in the secondary market.
Following the 364-day price action in last week’s primary market auction, investors reduced their interest. Shortly after adjusting the monetary policy rate, the Central Bank of Nigeria (CBN) lowered the rate on one-year bills at the auction.
The market then responded, sending Naira bills into a selling frenzy that raised the yield curve above 25%. The secondary market once again ended the week on a negative note as selloffs continued in the face of expectations that the yield would rebound.
Fixed-interest securities traders reported that the average yield on Nigerian Treasury bills expanded by 14 basis points to 25.3%. In its market note, Cordros Capital Limited told investors that across the curve, the average yield contracted at the short (-1 bp) and mid (-2 bp) segments.
Fixed income securities analysts said the yield curve backpedaled as investors demanded the 84-day maturity, causing its yield to bump by one basis point.
The market also saw an increase demand for the 175-day to maturity bill (-2 bps). Conversely, the average yield advanced at the long (+31 bps) end, driven by sell pressure on the 266-day to maturity (+213 bps) bill. Elsewhere, the average yield declined by 2 basis points to 25.3% in the OMO segment in the secondary market, traders said.
