The Nigerian Treasury Bills secondary market last week sustained a strong bullish trend, driven by an unprecedented surge in system liquidity that pushed yields lower, Afrinvest Securities reported on Tuesday.

As of Wednesday, 1 April 2026, the financial system entered the second quarter with a long position of N6.19 trillion. This ample liquidity renewed investor interest in short-term government securities, boosting demand and prompting a notable drop in the average benchmark yield.

“Last week, trading in the Nigerian Treasury Bills secondary market remained bullish, driven by robust system liquidity,” the Afrinvest report noted. “The average yield in the local market declined by 15 bps W-o-W to 17.61 per cent, from 17.76 per cent in the previous week.”

A detailed market assessment showed that the long end of the curve benefited most from the surge in demand. Yields on the 17-Dec-2026 and 10-Dec-2026 maturities fell sharply by 95 and 83 basis points, respectively.

Overall, the long end recorded an average yield decline of 29 basis points, while the short and mid-segments experienced more mixed performance.

In the sovereign bond market, FGN bonds recorded a more measured performance. Investors favored shorter-duration instruments to preserve liquidity, resulting in a slight increase in the average benchmark yield by 1 basis point, closing at 15.79 per cent.

“Yields at the short end dipped slightly by 1 bp to 16.13 per cent, showing that investors still favour instruments with shorter duration and better liquidity,” the analysts observed.

The mid-tenor segment came under selling pressure, with yields rising 14 basis points, while the long end edged down 3 basis points as investors moved to preserve current yield levels.

Looking ahead, the market is preparing for a high-volume Primary Market Auction set for Wednesday, 8 April 2026. The Debt Management Office plans to offer N700 billion in bills—N100 billion each for the 91-day and 182-day tenors, and N500 billion for the 364-day tenor—to refinance N356.47 billion in maturing obligations.

“We advise investors to trade on relatively attractive maturities across the curve and look out for available commercial paper and other corporate issues on offer,” the firm concluded.

The recommendation coincides with the DMO’s planned N750 billion FGN bond offer, covering the August 2030, June 2032, and May 2033 maturities.

Investors typically flock to long-term bonds when they believe interest rates have peaked, aiming to lock in attractive yields before the Central Bank of Nigeria potentially lowers rates.