Trading activity on Nigerian Treasury bills in the secondary market shifted to the sell side as inflation reversed its downward trajectory following two months of continuous slowdown.
Fixed interest securities dealers sold treasury notes held throughout the short, belly, and long term ends of the curve after the Apex Bank cut spot rates on one-year bills at the main auction last week.
Inflation, which stood at 32.70%, has increased real return on investment due to a reversal in the latest consumer price index.
The market experienced little selling demand at certain maturities. The average mid-rate for the benchmark Treasury bills papers rose by 43 basis points to 23.5%.
In its market update, analysts at Cordros Capital Limited reported that across the curve, the average yield dipped at the short (-1bp) and mid (-2bps) segments.
According to the investment banking firm, the yield contraction was driven by demand for the 72-day to maturity (-2bps) and 163-day to maturity (-2bps) bills, respectively.
On the other, the yield curve expanded at the long (+94bps) end due to profit-taking activities on the 219-day to maturity (+178bps) bill. Elsewhere, the average yield contracted by 2bps to 25.9% in the OMO bills segment ahead of CBN auctions.
