Traders said in their separate market updates that 20 basis points yield surge in the secondary market as there is selloffs in treasury bills instruments. The bearish trades were seen at the short end, belly and long end of the curve yesterday as investors book profit on their early exits.
After Nigeria’s policy authority decided to raise the policy rate by 4% to 22.75%, investors’ trading mood switched to an expectation of a higher return on funds.
As inflation and interest rates altered market dynamics, Cowry Asset Limited said trading activities on Nigerian Treasury Bills adjusted with marginal negative movement, causing a 20-basis point increase in the average T-bill yield to 16.25%.
In its market update, Cordros Capital Limited told investors that across the curve, the average yield increased at the short (+6bps), mid (+25bps) and long (+47bps) segments.
Traders explained that market participants took profits off the 57-day to maturity, 99-day to maturity and 344-day to maturity bills, respectively. Sell order executed on 57 days bills lifted its yield by 124 basis points. Also, the yield on 99-day bills to maturity increased by 90 basis points after investors unloaded it from their portfolio. Sell down in 344 longer-duration treasury bills caused the yield to rise by 147 basis points on Wednesday.
Traders said in their reports reviewed, the average yield contracted by 15 basis points to 18.0% in the OMO bill segment in the secondary market. In the money market, interbank borrowing rates declined across tenor buckets, excluding the overnight which trended higher by 31 basis points to close at 25.44%, according to Cowry Asset Limited.
Data from the FMDQ platform revealed that key money market rates, including the open repo rate (OPR) and overnight lending rate (OVN), concluded at 21.57% and 23.14%, respectively.