By BizWatch Nigeria
Key Points
- Average Treasury bills yield declined by 3 basis points in the secondary market.
- Investors increased demand for fixed-income securities amid excess system liquidity.
- Analysts linked stronger demand to inflation concerns and expectations of tighter market conditions.
- Select Treasury bill maturities recorded significant buying interest.
Main Story
Average yields on Nigerian Treasury bills declined in the secondary market as investors intensified demand for fixed-income assets amid growing liquidity within the financial system.
Market data showed that the average Treasury bills yield fell by three basis points to 17.48 per cent, reflecting renewed buying interest across short- and long-dated instruments.
The fixed-income market opened the week on a positive note as institutional investors, asset managers and portfolio managers continued repositioning portfolios ahead of Nigeria’s latest inflation figures.
Analysts said expectations of elevated inflationary pressure, partly driven by higher global crude oil prices and domestic cost pressures, encouraged investors to lock in existing yields before possible market repricing.
Investment firm Meristem Securities Limited noted that buying interest was visible across most Treasury instruments during the trading session.
According to the firm, notable demand was recorded for the 22-Apr-2027, 6-Aug-2026 and May-2027 papers, which witnessed yield contractions of 18 basis points, 16 basis points and eight basis points respectively.
However, moderate selloffs were observed in select maturities between August 2026 and September 2026.
Traders also reported stronger demand for the 06-AUG, 22-APR and 06-MAY Treasury bills as investors sought relatively stable returns amid uncertain macroeconomic conditions.
Nigeria’s fixed-income market has continued attracting investor interest following aggressive monetary tightening by the Central Bank of Nigeria over the past year aimed at curbing inflation and stabilising the naira.
Despite attractive nominal yields, analysts warn that persistently high inflation continues to weaken real returns for investors.
Meanwhile, the secondary bond market also traded on a mildly bullish note. Yield contractions at the short end of the curve offset slight expansions at the mid-segment, resulting in a one basis point decline in average bond yields to 16.09 per cent.
What’s Being Said
Fixed-income analysts said the combination of excess liquidity and inflation expectations is shaping investor behaviour in the debt market.
Market participants also believe investors are increasingly positioning ahead of future monetary policy decisions by the Central Bank of Nigeria.
Analysts added that demand for sovereign debt instruments remains strong because many investors still view Treasury bills and bonds as safer alternatives amid volatility in other asset classes.
What’s Next
Investors are expected to closely monitor Nigeria’s inflation data and upcoming Treasury bills auctions for further direction.
Any acceleration in inflation or additional tightening measures by the Central Bank could influence yield movements and investor sentiment across the fixed-income market.
Market participants will also watch developments in global oil prices and foreign exchange liquidity, both of which remain critical drivers of domestic monetary conditions.
Bottom Line
Strong investor appetite for Nigerian Treasury bills continues to compress yields despite inflation concerns. With liquidity remaining elevated and investors seeking safer assets, fixed-income securities are likely to remain attractive in the near term.
