…The fixed income market capitalization tumbled to its lowest level since 2023, down 0.21% to N48.46%.
SAT FEB 07 2026-theGBJournal| The Treasury bills secondary market closed on a bullish note, as investors mopped up unmet bids from the primary market auction (PMA), driving the average yield across all instruments lower by 24bps to 19.7%.
Across segments, average NTB yields declined sharply by 60bps to 17.6%, while average OMO yields increased by 26bps to 21.8%.
At Wednesday’s NTB PMA, the Debt Management Office (DMO) offered N1.15 trillion in bills, with total subscriptions reaching N4.59 trillion (bid-to-offer: 4.0x).
Ultimately, N952.60 billion was allotted (bid-to-cover: 4.8x), maintaining stop rates on the 91 Day tenor (15.84%) and 182 Day tenor (16.65%), while the stop rate on the 364 Day tenor declined by 137bps to 16.99%.
With the expectations of still strong system liquidity in the coming week, sustained investor demand is likely to support a modest moderation in secondary market yields.
Similarly, the FGN bond secondary market was bullish, driven by strong offshore demand. Consequently, average FGN bond yields decreased by 31bps to 16.2%.
Across the curve, the average yield decreased at the short (-25bps) and mid (-39bps) segments, driven by demand for the AUG-2030(-65bps) and JUN-2033 (-91bps) bonds, respectively; the long end was unchanged.
Over the medium to long term, FGN bond yields are likely to remain broadly stable, with ample system liquidity and robust auction demand cushioning the potential impact of increased supply from the 2026 fiscal deficit.
The OVN rate declined by 355bps to 22.8%, driven by inflows from OMO maturities (N1.03 trillion). Average system liquidity remained strong, closing at an average net long position of N4.05 trillion (prior week: N3.42 trillion).
Barring any liquidity management measures by the CBN, we expect inflows from OMO maturities (N993.00 billion) to boost system liquidity, potentially weighing on the OVN rate.
Overall, the fixed income market capitalization tumbled to its lowest level since 2023,down 0.21% to N48.46%.
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