Treasury Bills Drive N1.06tn Fixed-Income Surge In One Session

Nigeria’s fixed-income market posted one of its strongest single sessions of the year as total turnover crossed the N1tn mark, with investors pouring capital into short-dated government paper offering near-22 per cent returns.

Data from the Central Bank of Nigeria’s official Fixed Income Dashboard, released on Thursday, 4 June 2026, showed market turnover reaching N1.06tn across 551 executed trades and 25 unique market participants, driven overwhelmingly by demand for short-term sovereign instruments.

Nigerian Treasury Bills anchored the day’s activity, accounting for more than half of total volume. According to the dashboard summary, “Treasury Bills led the market with 340 trades, pooling an impressive volume of N668,005,110,000, with 24 distinct market participants actively driving the momentum.”

Demand was heavily concentrated in one-year tenors expiring June 2027. One instrument (ISIN: NGT030306275) absorbed major liquidity blocks, including a single transaction of N65bn at a closing rate of 19.09 per cent, while other tranches for the same maturity closed at yields as high as 19.54 per cent.

The CBN’s Open Market Operations served as a second liquidity sponge. The dashboard noted, “OMO Bills recorded a total volume of N224,408,000,000 across 43 trades, drawing in 11 key institutional participants as short-term yields continued to march upward.” The shortest bills, maturing 30 June 2026, triggered the day’s highest yields at a peak of 22.00 per cent for a N56.2bn block.

The FGN bond market told a different story, showing a flattened yield curve as investors favoured mid-term over long-dated paper. The segment saw 168 trades worth N170,362,824,000 from 19 institutions. The February 2031 bond cleared N76.26bn at a weighted average of 16.61 per cent, while the 27-year June 2053 bond settled lower at 14.95 per cent on a modest N6bn. The June 2032 bond carried the category’s highest rate at 18.78 per cent.

The session reflects a pattern that has defined the market through 2026. On 1 June, investors traded over N913bn, with OMO Bills accounting for N636.74bn and the bill maturing 16 June closing at 21.83 per cent. Days later, turnover on 8 June stood at N882.35bn, with OMO Bills contributing about 74 per cent of value and yields ranging between 18.38 and 21.68 per cent.

The elevated rates trace directly to monetary policy. At its 305th meeting on 20 May, the CBN’s Monetary Policy Committee retained the Monetary Policy Rate at 26.5 per cent, having cut it by 50 basis points from 27 per cent in February, the first reduction after an extended tightening cycle. The hold followed headline inflation rising to 15.69 per cent in April 2026 from 15.38 per cent in March.

The CBN has leaned on aggressive issuance to manage liquidity. It raised N1.457tn at its 3 June Treasury Bills auction and allotted N3.04tn at an OMO auction, even as roughly N2.09tn in OMO maturities and N464.60bn in maturing Treasury Bills flowed back into the banking system.

With near-20 per cent yields still well above headline inflation, analysts widely expect institutional appetite for short-dated naira assets to persist, keeping turnover elevated until the inflation trend gives the Monetary Policy Committee clear room to ease further.