Benchmark Yield Slumps After CBN Reprices T-Bills Rates
The average yield on Nigerian Treasury bills slumped to 13.6% after the Central Bank’s midweek primary market auction (PMA).
Treasury bills secondary market closed on a bullish sentiment last week, primarily driven by market players moving to cover for lost bids at the T-bills auction on Wednesday.
Consequently, the average yield across the market contracted by 85 basis points to 13.6%, according to fixed interest securities traders at Cordros Capital Limited.
Across the market segments, analysts noted that the average yield declined in the NTB and OMO secondary markets by 93bps and 5bps to 13.4% and 15.9%, respectively.
At the auction conducted by DMO on behalf of the apex bank, the debt agency offered participants instruments worth N310.12 billion.
According to analysts market updates, the investors’ subscription was split into N4.52 billion for the 91-day, N5.44 billion for the 182-day, and N300.16 billion for the 364-day bills.
In their separate reports, analysts said the subscription level at the auction settled at N875.79 billion, translating to a bid-to-offer of 2.8x. Demand at the auction skewed towards the longer-dated bill which attracted N826.79 billion in investor money, accounting for 94.4% of the total subscription.
Eventually, the DMO over-allotted on the one-year bill with total sales amounting to N497.20 billion – N4.52 billion for the 91-day, N5.44 billion for the 182-day, and N487.24 billion for the 364-day – at respective stop rates of 7.00% (previously: 6.00%), 11.00% (previously: 9.00%), and 16.75% (previously: 13.00%).
“We envisage reduced bill demand in the secondary market following our expectations of lower system liquidity. Thus, we believe yields in the secondary market will likely head northwards”, Cordros Capital said projecting into the new week. Nigeria US Dollar Bond Yield Climbs as FPIs Dump Assets
