Nigerian treasury bills could regain appeal

Nigerian treasury bills could regain appeal

Higher yields on Nigerian Treasury bills could lure back foreign investors who had turned their backs on the market in recent weeks.
However, demand for shorter-dated instruments in Kenya could wane after the Central Bank of Nigeria introduced longer-term repos to mop up liquidity, Reuters reports.
Offshore investors are seen returning to Nigeria’s debt market in the weeks ahead as yields on shorter-dated paper are becoming attractive again, traders said.
Foreign investors had been exiting their positions in the face of less attractive yields, rising inflation and the unresolved Eurozone debt crisis. But that could change as yields inch back up.
Nigeria sold 137.97 billion naira ($848.78 million) worth of Treasury bills on Thursday, with yields higher than at the previous auction.
“There is a gradual shift of attention by investors to the Treasury bills market due to rising yields in recent times and we foresee more offshore investors returning to take position in the market,” one dealer said.
The CBN on Thursday sold 32.97 billion naira worth of 3-month paper at a yield of 14.10 percent, compared to 13.50 percent at the previous auction.
It sold 45 billion naira worth of the 6-month bill at 14.94 percent, up from the 14.14 percent previously, and 60 billion naira of 1-year paper at a yield of 15.69 percent, from 13.30 per cent.
Traders said the bond market has remained sluggish as major investors shy away from taking positions, opting instead for short-dated instruments because of the more generous yields.