Yield on Nigerian treasury bills shrinks as market rally

The average yield on Nigerian treasury bills shrank as investors boost their portfolios with more short term instruments after disinflation.

The market had reacted negatively to reversal in headline inflation after two consecutive months of deceleration.

Investors offloaded naira assets across the short, belly and long end of the curve as negative interest yield widened on the back of September inflation surge data.

According to fixed interest securities analysts, trading activities in the Treasury bills secondary market ended on a bullish note on Thursday. Due to buying interest recorded in the market, the average yield declined by 3 basis points to settle at 23.5%.

In its market update, Cordros Capital Limited said the average yield contracted at the short (-1bp), mid (-2bps), and long (-6bps) segments,

Fixed income analysts said the yield contracted following buying interests in the 84-day to maturity (-1bp), 175-day to maturity (-2bps), and 217-day to maturity (-48bps) bills, respectively.

Conversely, the average yield expanded by 12 basis points to 26.0% in the OMO bills segment in the secondary market at the same time.

The treasury bill market experienced bearish sentiments due to a persistent liquidity crunch, AIICO Capital Limited said in its note.

Analysts said most activity was concentrated on the February and September 2025 maturities, with the former trading at a discount of over 23.00%.

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