In the secondary market, the average yield on Nigerian Treasury notes increased little as investors reduced their holdings in their portfolios in an effort to find liquidity.
Despite many primary market auctions throughout the previous week, there was still a low level of liquidity in the financial sector. The short-term interest rate has risen beyond 31% due to the reduction in financing profile.
Banks in need of cash were obliged to decide whether to sell off a portion of their short-term investment assets or borrow money from the Central Bank of Nigeria (CBN).
The difficult decision elevated the yield during the majority of this week’s trading sessions by making Treasury bills the target for liquidity conversion. In their separate market updates, fixed interest securities analyst said the treasury bills market had a mixed-to-bearish posture on Wednesday.
The market experienced selling interest in Jan, Feb, and Mar 2025 bills and mild buying interest observed in the 26 June paper, AIICO Capital Limited told investors via update.
Overall, the executed volumes were low. The bearish tilt however pushed the average yield higher by 16 basis points to 22.2%, according to Cordros Capital Limited.
Traders said across the curve, the average yield pared at the short (-1bp) and mid (-1bp) segments, driven by mild interest in the 85-day to maturity (-1bp) and 176-day to maturity (-1bp) bills, respectively.
Meanwhile, the average yield expanded at the long (+39bps) end due to profit-taking activities on the 295-day to maturity (+77bps) bill.
Conversely, the average yield contracted by 2bps to 23.4% in the OMO segment in the secondary market, Cordros Capital Limited told investors in its market update.
