Average yields for Nigerian Treasury bills and Open Market Operations (OMO) bills hovered around 25% in the secondary market on Wednesday, August 1, 2024. The stability follows a period of rapid sell-offs in the Treasury bills market, while the OMO bill segment has remained relatively stable.
Market participants are anticipating fluctuations in rates after recent tightening of the benchmark interest rate by the monetary authority, aimed at curbing rising inflation.
Recent results from the Debt Management Office's latest bond auction suggest that further rate adjustments may be on the horizon.
A cautious sentiment among fixed income investors has led to a selling spree of naira assets. This unease about the local economy has prompted portfolio investors to reassess their strategies in light of current market developments.
By the close of Wednesday's trading, the Treasury bill market saw only a few transactions, ending with a slight bearish trend. The average yield edged up by 1 basis point to 25.2%.
The yield curve saw varied movements this week, with short-term and mid-term yields contracting slightly. According to Cordros Capital Limited, the average yield for short-term securities decreased by 1 basis point (bps), while mid-term yields fell by 2 bps, driven by a 1 bps drop in yields for 85-day maturities.
In contrast, the market experienced a sell-off in 176-day maturities, leading to a 2 bps decline in their yields. However, long-term yields saw an increase of 4 bps, spurred by sell pressures on 295-day maturities, which saw a notable yield rise of 66 bps.
In the Open Market Operations (OMO) segment, the average yield declined by 2 bps to 25.3%, according to an investment firm’s email update to investors.
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