The Nigerian Treasury Bills market continued to experience subdued activity in the secondary segment, with investors shifting focus to the newly floated OMO bills, which attracted significant attention.
Following last week’s primary market auction, average returns on treasury bills have declined by 100 basis points. The drop was largely driven by disinflationary signals prompting asset repricing, as policymakers attempt to lower borrowing costs and enhance fiscal stability.
With no primary auction during the midweek, the fixed income market remained tilted toward cautious bargain hunting. As a result, average yields in the treasury bills space edged down by 2 basis points to 17.66%, with increased positioning by banks and institutional investors seeking yield opportunities in naira-denominated assets.
The Central Bank of Nigeria (CBN) has been steadily adjusting returns on risk-free assets to reflect easing inflation trends, thereby lowering spot rates across various tenors. The secondary treasury market responded with renewed interest in longer-dated instruments, particularly the OMO maturity dated 17 February 2026, which initially traded near 22.80% before closing at 23.14%.
Investor sentiment remained positive toward November maturities trading at 16.39%, while July-dated bills witnessed weaker demand. Investment firm Cordros Capital noted a broad-based decline in yields across all curve segments, including the short-term (-1 basis point), medium-term (-2 basis points), and long-term (-2 basis points) ends.
Specific maturities saw stronger investor appetite, particularly the 72-day (-1 basis point), 114-day (-3 basis points), and 226-day (-13 basis points) tenors.
In contrast, the average yield in the OMO segment rose slightly by 2 basis points to 24.7%, underscoring mixed sentiment in the market. Despite falling spot rates, fixed-income yields trended lower during the first half of 2025, driven by high system liquidity, especially in the second quarter.
