The average yield on Nigerian Treasury bills (NGX) dipped by four basis points at the start of the week, reflecting mixed sentiment in the secondary market following the imposition of a 14% U.S. tariff on Nigerian exports. Foreign portfolio investors (FPIs) were the main drivers of the selloff in the secondary market, amid rising demand for safer assets and concerns that the Nigerian government could face increased revenue pressures due to the tariff hike.
Trading activity in the secondary market ended on a bearish note on Monday, with the average yield rising by 4 basis points to 19.9%, according to Cordros Capital Limited.
The growing “risk-off” sentiment, triggered by a shift toward safe haven assets, has led to increased FPI selloffs in the Nigerian market. As offshore investors exit, local market participants have begun to seize opportunities at attractive yield levels.
The selling pressure from foreign investors overwhelmed the limited buy-side interest. Although some demand emerged for short-tenor bills, offers remained scarce. Trading focused on maturities in February and March 2026, with some buying interest observed in bills maturing on January 22 (-327 bps) and December 25 (-179 bps).
Fixed income analysts at Cordros Capital noted that yields contracted slightly in the short (-3 bps) and mid (-3 bps) segments, driven by demand for bills maturing in 80 days (-3 bps) and 171 days (-3 bps). However, the long end of the curve saw an 11 basis point increase, mainly due to profit-taking on the 318-day bill, which saw a rise of +155 bps.
Additionally, the average yield in the Open Market Operations (OMO) segment contracted by 5 basis points to 24.3%.
Analysts suggest that the bearish tone may persist, particularly ahead of this week’s potential Nigerian Treasury Bill (NTB) auction. Investors are also closely monitoring the Q2 2025 borrowing calendar for further direction.
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