T-Bills Yield Increases By 20bps As Investors Take Profit

LBS Discloses FG's Targets With Naira Redesigning

According to dealers’ separate market updates, selloffs in treasury bills instruments caused a yield spike in the secondary market of 20 basis points. Yesterday, when investors booked profits on their early departures, negative transactions were observed at the short end, belly, and long end of the curve.

The policy rate in Nigeria was raised by 4% to 22.75%, and this decision caused investors’ trading sentiment to shift to one of anticipation for a larger return on investment.

According to Cowry Asset Limited, trading activity on Nigerian Treasury Bills adjusted with somewhat negative movement as inflation and interest rates changed the market dynamics. This resulted in an increase of 20 basis points in the average T-bill yield to 16.25%.

Cordros Capital Limited informed investors in its market report that, across the curve, the average yield increased at the short (+6bps), mid (+25bps) and long (+47bps) segments.

Traders explained that market participants took profits off the 57-day to maturity, 99-day to maturity and 344-day to maturity bills, respectively. Sell order executed on 57 days bills lifted its yield by 124 basis points. Also, the yield on 99-day bills to maturity increased by 90 basis points after investors unloaded it from their portfolio. Sell down in 344 longer-duration treasury bills caused the yield to rise by 147 basis points on Wednesday.

Elsewhere, the average yield contracted by 15 basis points to 18.0% in the OMO bill segment in the secondary market, traders said in their reports reviewed by MarketForces Africa.

In the money market, interbank borrowing rates declined across tenor buckets, excluding the overnight which trended higher by 31 basis points to close at 25.44%, according to Cowry Asset Limited.

Data from the FMDQ platform revealed that key money market rates, including the open repo rate (OPR) and overnight lending rate (OVN), concluded at 21.57% and 23.14%, respectively.

In the bond market, secondary market activity for FGN Bonds was largely bearish, resulting in a 38bps increase in the average secondary market yield to 17.21%.

Leave a Reply