The average yield on Nigerian Treasury bills rose by 27 basis points as increased sell pressure swept through the secondary market, driven by investor reactions to rising inflation and recent adjustments in primary market rates.
Market participants have been reducing exposure to government securities in response to an inflation surge, while others have been recalibrating positions following spot rate changes at recent primary market auctions. Despite the cautious sentiment, some asset managers and institutional investors are locking in higher returns at the long end of the yield curve, anticipating further repricing.
Fixed income market analysts said investor behaviour reflects shifting macroeconomic conditions, with returns tightening as the consumer price index edged close to 16%, while the benchmark interest rate remained at 26.5%.
The Nigerian financial markets are undergoing a broad repositioning, with investors offloading both debt instruments and risk assets. The equities market also closed in negative territory, while Treasury bills and bond markets recorded widespread sell-offs despite liquidity levels in the system, signalling a broader capital rotation.
Several analysts attributed the trend to foreign portfolio investors moving towards safer assets, a pattern also reflected in continued pressure on the naira in the foreign exchange market.
Trading activity in the Nigerian Treasury bills segment ended on a bearish note, with yields rising across the curve—short-term (+9 bps), mid-term (+28 bps), and long-term (+36 bps) instruments. As a result, the average yield increased by 27 basis points to settle at 18.59%.
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