After mixed trading activity in the fixed income market, the average yield on Nigerian Treasury bills decreased to 20% in the secondary market.
Significant selling pressure was seen on the mid-dated papers, according to a note from AIICO Capital Limited to investors, while only little bidding activity was seen on the long end of the curve.
Strong market liquidity helped to support the positioning at the long end of the curve.
According to Cowry Asset Management Limited, investors saw a fall in Nigerian interbank offering rates in the money market, which was attributed to the FAAC’s disbursements injecting liquidity into the system.
Overall, the Open Repo Rate (OPR) declined by 5 bps to 23.45%, while the Overnight Rate (O/N) increased by 1 bp to 24.04%
Meanwhile, Nigerian Treasury True Yield was in the mixed bag reflecting the expectation for Nigerian T-bills auction on Wednesday, where higher rates and yields are expected at the primary market auction, traders said.
Across the curve, Cordros Capital Limited said the average yield pared at the short (-1bp) and mid (-1bp) segments driven by mild interest in the 79-day to maturity whose yield dipped by 1bp and 170-day to maturity with 1bp yield contraction.
Conversely, the average yield expanded at the long (+21bps) end due to profit taking activities on the 226-day to maturity, causing its yield to rise 90bps. Similarly, the average yield advanced by 124bps to 23.5% in the OMO bills segment.
By the end of the session, the average mid-rate had decreased by 2 bps to 20.16%. Investment firm AIICO Capital expects market to be skewed towards tomorrow’s auction.
