Fixed-income refers to the market for bonds and Treasury bills, which are so called because the income from such financial instruments, unlike those from stocks, are fixed. In stocks trading, there’s more volatility, which could result in big gains and big losses as well. However, in the trading of bonds and T-bills, the issuer let’s the buyer know from the outcome what the interest payment will be at the end of the borrowing tenure.
Both Treasury bills and bonds are borrowing instruments used by governments and corporate organizations to raise funds. Treasury bills are usually issued by governments, by the treasury, thereby the name. They’re of relatively shorter tenor than bonds, usually not exceeding one year. Longer-term debt instruments are the ones known as bonds. In both cases the income to be earned is fixed, and this is why the yield (interest) on a bond rises when the price of the bond falls and falls when the bond price rises.
Bonds and Treasury bills sales are usually announced by the issuers ahead of auction, inviting prospective investors to subscribe. These securities are also listed on the Nigerian Stock Exchange as well as another trading platform known as the FMDQ, where they can be bought and sold as some bond holders exit the market and new buyers enter.