The average yield on Nigerian Treasury bills fell below 23% due to increasing demand for naira assets in the secondary market, down from 23.10% following Wednesday’s primary market auction. According to fixed income professionals, the most recent advance in the Treasury bills market was fueled by unfulfilled bids at the primary market auction held this week.
Fund and asset managers fill gaps in their portfolios, causing yields to swing, with the average yield falling by 20 basis points to 22.8% in the secondary market on Thursday. According to Cordros Capital Limited, the average yield dropped across the curve in the market’s short (-17 bps), mid (-28 bps), and long (-16 bps) sectors.
The Nigerian Treasury bills yield decline was attributed to buying interest on the 91-day to maturity bills, whose yield declined by -112 bps. As a result of market demand for 105-day-to-maturity bills, its yield curve sloped downward by -89 bps, while buying interest on 196-day-to-maturity bills dragged its yield lower by 84 bps.
Similarly, the average yield dipped by 45bps to 25.3% in the OMO bills segment in the secondary market due to increasing demand after failed primary market auctions attempted last month.
The Central Bank of Nigeria (CBN) held a Treasury Bills (T-Bills) Primary Market Auction (PMA) on the 21st of August, 2024. At the PMA, existing Treasury Bills totalling N409.98 billion across standard maturities were offered to investors for subscription.
The amount was split into three maturities across the 91-day (N60.69 billion), 182-day (N66.25 billion), and 364-day (N283.04 billion) maturities that matured and were rolled over.
