Yield on T-Bills Steadies as Trading Activities Slowdown Ahead of Auction
The average yield on Treasury bills is on rest from up and downward swings with a slowdown in trading activities ahead of the Central Bank of Nigeria (CBN) primary market auction (PMA) on Wednesday.
Tomorrow, the apex bank is scheduled to conduct a Primary Market Auction to roll over Nigerian Treasury bills maturities worth ₦150.81 billion across 91-day (₦4.80 billion), 182-day (₦7.98 billion), and 364-day (₦138.03 billion) tenors.
Analysts at however predicting a further slowdown in the 364-day spot rate after consecutive decline seen in the previous auctions as disinflation keep check of negative real returns.
In the money market, data from the FMDQ Exchange platform shows that the average interbank rate dropped by 200 basis points to 3.00% following contractions in both the Open Buy Back and Overnight rate.
The Overnight (O/N) rate decreased by 1.92 per cent to close at 3.33 per cent as against the last close of 5.25 per cent, and the Open Buy Back (OBB) rate decreased by 2.08 per cent to close at 2.67 per cent compared to 4.75 per cent on the previous day.
Ahead of the CBN auction, the Nigerian T-Bills secondary market closed on a flat note, with the average yield across the curve closing flat at 5.33 per cent.
Analysts at FSDH noted in a market report that average yields across short-term and medium-term maturities remained unchanged at 3.66 per cent and 4.38 per cent, respectively.
However, the average yield across the long-term maturities expanded by 1 basis point. Nigerian Treasury bills 8-Sep-22 (+14 bps) maturity bill witnessed selling pressure, while yields on 19 bills remained unchanged.
In the open market operations (OMO), the average yield across the curve decreased by 7 basis points to close at 6.02 per cent as against the last close of 6.09 per cent, according to Cordros Capital analysts.
FSDH said average yields across medium-term and long-term maturities compressed by 19 bps and 5 bps, respectively. However, the average yield across the short-term maturities remained unchanged at 6.06 per cent.
Yields on bills declined with the 1-Mar-22 maturity bill recording the highest yield decrease of 39 basis points, according to FSDH Capital while yields on 14 bills remained unchanged.
It was noted that FGN bonds secondary market closed on a negative note today as the average bond yield across the curve cleared higher by 10 basis points to close at 8.45 per cent from 8.35 per cent on the previous day.
Average yields across the short tenor and long tenor of the curve increased by 13 and 2 basis points, respectively, according to fixed income analysts.
However, the average yield across the medium tenor of the curve remained unchanged. The 27-APR-2023 maturity bond was the worst performer with an increase in yield of 51 basis points, FSDH said.
Elsewhere, activities at the Eurobond market traded on mixed sentiments as average yield dipped slightly by 1 basis point to close at 6.56%. #Yield on T-Bills Steadies as Trading Activities Slowdown Ahead of Auction
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