Nigeria’s Treasury Bills secondary market sustained a bullish trend last week, driven by a surge in system liquidity that pushed yields lower, according to a report by Afrinvest Securities.

The firm disclosed that the financial system opened the second quarter with a long position of N6.19 trillion as of April 1, 2026, boosting investor demand for short-term government instruments and compressing yields.

Afrinvest noted that average benchmark yield in the Treasury Bills market declined by 15 basis points week-on-week to 17.61 per cent, from 17.76 per cent recorded in the previous week.

The rally was largely concentrated at the long end of the curve, where yields on the 17 December 2026 and 10 December 2026 maturities dropped sharply by 95 and 83 basis points, respectively. Overall, the long segment recorded an average yield contraction of 29 basis points, while performance across the short and mid segments was mixed.

In the sovereign debt market, Federal Government of Nigeria (FGN) bonds showed a more subdued performance. The average benchmark yield edged up slightly by one basis point to 15.79 per cent, reflecting cautious investor sentiment.

Analysts observed that yields at the short end dipped marginally, indicating continued preference for liquid, short-duration instruments.

Meanwhile, the mid-tenor segment experienced selling pressure, with yields rising by 14 basis points, while the long end recorded a slight decline as investors sought to lock in existing rates.

Looking ahead, market activity is expected to be shaped by a major Primary Market Auction scheduled for April 8, 2026. The Debt Management Office is set to offer N700 billion worth of Treasury Bills, including N100 billion each for the 91-day and 182-day tenors and N500 billion for the 364-day tenor, aimed at refinancing N356.47 billion in maturing obligations.

Afrinvest advised investors to remain strategic in their allocations amid the prevailing liquidity conditions and anticipated auction pressures, recommending attention to attractive maturities as well as opportunities in commercial papers and corporate debt instruments.

The firm’s outlook comes as the Debt Management Office also plans a N750 billion FGN bond issuance across August 2030, June 2032 and May 2033 maturities.

Market analysts noted that investor behaviour suggests a cautious approach, with funds shifting away from mid-term instruments toward short-term liquidity and long-term securities, particularly as expectations grow that interest rates may have peaked.