Demand for Naira Asset Drags Nigerian Treasury Bills Lower
The average yield on Nigerian Treasury Bills dipped in the secondary market as investors ramped up their holdings of naira-denominated assets, with optimism about economic growth boosting sentiment.
The bargain hunting was whipped up after a slight repricing of spot rates at the main auction conducted by the Apex Bank last week, and by 3.89% year-on-year GDP growth in Q1 2026.
Both fixed-income and equity market investors reacted positively, with buying interest across naira-denominated assets, and increased demand for the local unit boosted the exchange rate.
The average yield declined by 3 basis points (bps) to 17.48%, reflecting increased investor demand and a broadly positive tone across the fixed-income. Fixed income market traders reported buying across the mid (-3bps) and long (-6bps) segments of the curve.
Notably, yields contracted on Nigerian Treasury bills maturing on 03-DEC (-30 bps), 10-DEC (-33 bps), 17-DEC (-38 bps), 22-Apr-27 (-16 bps), and 18-Feb-27 (-11 bps).
Meanwhile, Nigerian Treasury bills with maturities of Mar-2027, 18-Jun-2026 (+21bps), and 6-Aug-2026 (+13bps) were the only papers on the sell side.
Last week, the market traded on a largely quiet, range-bound note, with limited activity across the curve as investors maintained a cautious stance ahead of the Nigerian Treasury bills primary market auction.
Trading opened on a subdued note, with low action keeping yields largely unchanged across all tenors, reflecting muted investor appetite and a wait-and-see approach.
Market sentiment shifted slightly following the midweek Treasury bills auction, in which the Central Bank offered ₦650 billion across the 91-day, 182-day, and 364-day tenors.
Total subscriptions came in at ₦1.99 trillion, reflecting strong investor demand, while ₦829.33 billion was eventually allotted. #Demand for Naira Asset Drags Nigerian Treasury Bills Lower Nigerian Exchange Index Climbs as Investors Gain N905bn
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