…The DMO offered a total of N650.00 billion across the 91-day, 182-day, and 364-day tenors, while aggregate subscriptions surged to N1.99 trillion
WED MAY 20 2026-theGBJournal| Nigeria’s fixed income market witnessed mixed sentiment as robust investor appetite for Treasury bills continued to support lower yields in the money market and NTB segment, while bearish trading persisted in the Federal Government bond market amid renewed sell pressures across key maturities.
The moderation in short-term rates reflects improving liquidity conditions within the financial system, even as longer-dated instruments remain vulnerable to profit-taking and inflation concerns.
The overnight lending rate declined by 9 basis points to 22.5%, underscoring the absence of significant funding pressure in the banking system and indicating relatively comfortable liquidity conditions among financial institutions.
In the Treasury bills secondary market, trading activities remained bullish, with the average yield easing marginally by 1 basis point to close at 17.5%.
Across the curve, yields compressed at both the short and long ends as investors showed increased demand for the 92-day-to-maturity and 351-day-to-maturity instruments, each declining by 1 basis point.
However, yields at the mid-segment of the curve remained unchanged, reflecting a more cautious positioning by investors in medium-tenor bills.
Similarly, the Open Market Operations (OMO) segment recorded modest bullish sentiment, with the average yield contracting by 1 basis point to 21.2%, as investors continued to seek attractive short-term yields amid expectations of a stable monetary policy environment.
At the primary market auction conducted by the Debt Management Office (DMO), investor demand remained significantly strong despite relatively unchanged stop rates.
The DMO offered a total of N650.00 billion across the 91-day, 182-day, and 364-day tenors, while aggregate subscriptions surged to N1.99 trillion, translating to a bid-to-offer ratio of 3.1x and highlighting sustained investor appetite for government securities.
Ultimately, the DMO allotted N829.33 billion worth of Treasury bills, resulting in a bid-to-cover ratio of 2.4x.
Stop rates were maintained at 15.95% for the 91-day tenor, 16.14% for the 182-day instrument, and 16.15% for the 364-day bill, suggesting the authorities’ preference to avoid aggressive upward repricing of short-term borrowing costs despite elevated market demand.
In contrast, the Federal Government bond secondary market closed on a bearish note, with the average yield expanding by 14 basis points to 15.8% as investors reduced exposure to longer-dated instruments.
Yield expansion was observed across all benchmark segments of the curve, with the short-end rising by 8 basis points, the mid-segment increasing by 3 basis points, and the long-end jumping by 24 basis points.
The bearish performance was largely driven by sell pressures on the FEB-2031 bond, whose yield climbed by 35 basis points, the JUN-2033 bond which advanced by 15 basis points, and the APR-2037 bond which recorded a sharp 150 basis points increase in yield.
Market analysts noted that while strong liquidity conditions and sustained demand continue to support the Treasury bills market, investors in the bond market remain cautious over inflationary risks, fiscal borrowing pressures, and expectations surrounding future interest rate direction, prompting a gradual shift toward shorter-duration instruments.
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