The average yield on Nigerian government Treasury bills rose on Wednesday as fixed income investors exited positions, signaling a shift in sentiment in the secondary market.
Recent sell-offs reflect growing investor caution, with the average yield climbing 10 basis points to 17.6%, according to reports from several investment banking firms. The uptick was most pronounced at the long end of the yield curve, driven by profit-taking and capital flight concerns amid falling spot rates.
Analysts note that declining yields in recent weeks—driven by excess liquidity, disinflation, and improvements in key macroeconomic indicators—had set the stage for a reversal, especially as the returns on short- and mid-term instruments became less attractive to investors, including foreign participants.
On Wednesday, investors offloaded Nigerian Treasury bills maturing on February 19, June 4, and July 9, causing yields to spike. Notably, the yield on the 344-day Treasury bill surged by 77 basis points.
Cordros Capital Limited reported that while average yields declined slightly at the short (-1 bp) and mid (-1 bp) segments of the curve—due to continued demand for bills maturing in 85 days and 176 days—the long end saw a steep increase of +22 basis points, reflecting risk-off sentiment.
The yield on the 05-Mar-2026 and 09-Jul-2026 bills both rose to 18.69%, up by 16 and 77 basis points, respectively.
In contrast, the Open Market Operations (OMO) segment saw a slight reprieve, with average yields contracting by 2 basis points to 24.7%.
The shifting dynamics in the fixed income market highlight investor sensitivity to changing macroeconomic signals and the delicate balance between risk and return in a volatile environment.
