Nigeria’s Yields Rise as Investors Dump OMO, Treasury Bills
Nigerian OMO and Treasury bills yields increased due to sell pressures across the short-, mid-, and long-term tenor instruments in the secondary market.
Investors reduced their holdings as the fund rotated across financial markets, including equities and currency, reinforcing a sense of strategic repositioning during uncertain times.
Treasury bills and OMO bills were sold in the secondary market despite surplus liquidity, suggesting asset managers and pension funds were repositioning to optimise structured portfolios amid evolving market conditions.
System liquidity moderated to ₦2.67 trillion long, down from ₦3.52 trillion recorded the prior day. This decline, driven by debits (₦1.11 trillion) from yesterday’s OMO auction, reflects the market’s adjustment to recent activity.
Consequently, the overnight funding rate (O/N) inched up by 10 bps to close at 22.25%, up from 22.15 previously. Meanwhile, the Open Repo rate (OPR) remained unchanged at 22.00%.
Fixed income market traders trimmed positions after the monetary policy rate downward adjustment, suggesting Apex Bank will reprice spot rates at next week’s Treasury bills auction.
In the secondary market, there was a sell-off across the belly and the long end of the curve on Thursday. The Risk-off sentiment made investors more cautious, nudging the average benchmark yield higher by 2 bps to close at 17.19%.
The OMO bills secondary market closed on a bearish note, with the average benchmark yield expanding by an impressive 58 basis points to 20.31%.
This substantial shift was primarily driven by sell-offs in the 160-day-to-maturity bills (+100 basis points) and the 132-day-to-maturity bills (+79 basis points).
This dynamic landscape underscores the urgency of strategic positioning as market conditions evolve, compelling investors to act decisively to pursue optimal returns. Naira Falls on Growing FX Outflow Despite Intervention
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