Ahead of an N800 billion Treasury Bills auction scheduled for Wednesday, the average yield on Nigerian Treasury Bills remains at 19%. Traders in the secondary market showed a positive sentiment towards naira-based assets.
Some investors opted to sell their holdings in anticipation of higher yields. However, demand for these securities remained low, leaving many sell offers unmet.
Across different tenors, average yields dropped slightly by 1 basis point (bp) for short-term, mid-term, and long-term Treasury Bills. According to Cordros Capital Limited, this decline was driven by demand for bills maturing in 79 days (-1bp), 177 days (-1bp), and 338 days (-2bps).
Market activity remained subdued as banks and asset management firms prepared for the upcoming auction. The Debt Management Office (DMO), acting on behalf of the CBN, will offer N800 billion in Treasury Bills across 91-day, 182-day, and 364-day maturities.
The auction is expected to attract strong interest from investors, given the positive returns on fixed-income securities and improving economic data. However, analysts warn that a shortage of liquidity in the banking sector may limit the total amount of bids submitted.
In a related development, the average yield on Open Market Operations (OMO) bills in the secondary market also declined slightly by 1 basis point to 22.3%.
