Nigeria’s Treasury bills secondary market witnessed heightened activity, closing the trading week on a bullish note despite the inflation rate spiking to 34.80% in December.
Amid inflationary concerns, investors increased their portfolio holdings in Treasury bills, leading to yield contraction across the curve. The average yield dipped by 12 basis points to 25.2%, reflecting sustained demand across various maturities.
Specifically, the short-end segment saw the largest contraction of 21 basis points, followed by 2 and 11 basis points in the mid and long ends, respectively. Analysts highlighted significant demand for the 72-day (-139bps), 177-day (-2bps), and 331-day (-48bps) bills. The 8 January 2026 bill attracted the most interest, recording the steepest yield decline of 27 basis points.
Market participants also showed selective engagement across the curve, with notable trading activity in maturities slated for March 2025, April 2025, May 2025, and into early 2026. However, the shorter end of the curve faced limited action due to a wide bid-ask spread, according to AIICO Capital Limited.
In the Open Market Operation (OMO) segment, the average yield held steady at 28.4%, underscoring investor preference for secondary market opportunities driven by liquidity conditions.
Analysts anticipate that current market trends will persist, albeit at a measured pace, as traders align their strategies with liquidity dynamics and inflationary pressures. The developments highlight a delicate balancing act for investors navigating the fixed income landscape in an inflationary environment.
