In the secondary market, the average yield on Nigerian Treasury bills edged higher again at the beginning of the week due to sell pressure triggered by disinflation.
The inflation rate rose in September to 32.70% after two consecutive month’s decline, according to data reported by the statistic office. The increase in headline inflation pushed negative interest yields higher while the market continued to experience spot rate adjustments at the Central Bank auctions.
Despite a relatively high yield on the naira assets, portfolios investors in the local debt market has continue to seek higher rates due to inflation pressure.
Inflation is anticipated to maintain uptrend in the latter part of the year due to increase in petrol price. At the same time, the market anticipates that the apex bank would maintain interest rate tightening to combat inflation headlong.
Reacting to the market dynamics, trading activities on Nigerian Treasury bills ended on a bearish note in the secondary market.
Due to investors selling down their interest in Nigerian Treasury bills, the average yield expanded by 2bps to 24.2%, according to market updates released by investment firms.
In its update, Cordros Capital Limited said the average yield declined at the short (-4bps) and long (-2bps) ends. The yield contraction was driven by record demand across the short, belly and ling end of the curve.
Traders said investors raised bet on 80-day to maturity bills, which then caused a -4bps yield decline on that line. Demand for 318 day to maturity also dragged its yield down by -84bps.
However, yield expanded at the mid (+13bps) segment due to profit-taking activities on the 157-day to maturity which shed +90bps. Conversely, the average yield dipped by 5 basis points to 25.9% in the OMO bill segment in the fixed income market.
In the OMO space, steady interest was shown in the paper maturing on October 7, 2025. Overall, the average mid-rate for the benchmark NTB declined by 23 bps, closing at 21.29%.
