Average yields on Nigerian Treasury bills declined by 27 basis points as strong buying momentum continued in the secondary market following the latest auction by the Central Bank of Nigeria (CBN).
The CBN had offered N250 billion in Treasury bills for subscription, attracting over N1.3 trillion in bids. With the excess bids of more than N1 trillion rejected, investors turned to the secondary market on Thursday, driving up demand across short, mid, and long tenors.
Cordros Capital Limited noted that the increased demand pushed average Treasury bill yields down to 19.1% as prices climbed.
Specifically, yields at the short end of the curve fell by 19 basis points, while mid-tenor bills saw yields decline by 37 basis points. Long-dated bills recorded a 25-basis-point drop in yields.
Analysts attributed the yield drop at the short end to strong demand for the 91-day bill, which saw a sharp decline of 145 basis points. Similarly, the 147-day bill drove the yield drop at the mid-segment, falling by 154 basis points, while the 245-day bill led the decline at the long end, shedding 292 basis points.
In the Open Market Operations (OMO) segment, average yields also contracted by 66 basis points to 24.4%, with renewed interest in short-term bills, particularly the October/November Treasury bills and the new 1-year bill maturing on July 9, which cleared at 15.45%. Demand also picked up for January and March OMO papers.
Analysts expect yields to continue declining amid strong liquidity conditions in the money market, sustaining investor interest in short-term fixed-income instruments.
