T-Bills Yield Bumps to 5.2% as Fixed Income Market Trades Quiet

T-Bills Yield Bumps to 5.2% as Fixed Income Market Trades Quiet

Treasury Bills (T-Bills) secondary market sees a 10 basis points yield drop to 5.2 per cent on Thursday after the primary market auction conducted by the Central Bank yesterday as the fixed income market trades quietly.

The CBN auction records robust subscription but spot rates were steady at 91-day and 182-bills but there was an uptick at the long-dated tenor as the 364-day spot rate rises to 7.50 per cent.

While investors shifted attention to the auction, activity in the secondary space was quiet and cold as investors continue to search for catalysts to drive returns upward. Frontier market central bank continue to tackle inflation with a higher interest rate, but monetary policy authority in Nigeria maintains cold feet.

CBN has remained largely pro-growth as it designs measures including its 65 per cent loan to deposit ratio policy to drive credits to the real sector. To a large extent, the move helped the economic recovery but analysts think CBN would not be able to hold onto its low-interest rate drive for long amidst bong buying plan in the United States.

In a market report, Alpha Morgan Capital said activities at the Nigerian Treasury bills secondary market traded in the red in today’s session following 32 and 8 basis points declines in both the short and mid ends of the curve.

Consequently, the average yield dropped by 10 basis points to close at 5.20 per cent as data from the FMDQ Exchange platform shows that the naira depreciated by 1.7 per cent to N422.07 at the Investors and Exporters FX window.

Reversing the previous slowdown, the average interbank rate climbed by 338 basis points to 11.13 per cent following 350 basis points increases in the Open Buy Back (OBB) rate and 325 basis points jump overnight (OVN) lending rate to close at 11.00per cent and 11.25 per cent, respectively.

Analysts at Cordros Capital attribute the pressure on short term rates to N65.57 billion outflows for net treasury bills issuances.

Across the benchmark curve, analysts at Cordros Capital stated that the average yield contracted at the short (-29bps), and mid (-10bps) segments due to demand for the 14 day to maturity (-34bps) and 105 day to maturity (-18bps) bills, respectively; the long end was flat.

Elsewhere, the average yield at the open market operations (OMO) segment was flat at 6.5 per cent.

In the federal government of Nigeria (FGN) bond market, trading was quiet, according to some fixed income analysts that spoke with MarketForces Africa as the bureau of statistics sets to release the September inflation figure on Friday.

FGN bond secondary market was mixed in today’s session following a 9 basis points drop in the short tenor, a 4 basis points climb in the mid tenor while the long end of the curve remained flat. Consequently, the average yield climbed slightly by 1 basis point to close at 11.36 per cent.

Analysts detailed that the average yield expanded slightly at the short (+1bp) end following the sell-off of the JAN-2026 (+21bps) bond but was flat at the mid and long segments.

In reverse, activities at the Eurobond market traded on a bullish note in today’s session following declines across all instruments. In sum, the average yield was down by 8 basis points to close at 6.44 per cent.

# T-Bills Yield Bumps to 5.2% as Fixed Income Market Trades Quiet