Treasury Bill Yield Dips, Investors Get Higher Auction Rates
The average yield on Nigerian government treasury bill declined slightly despite a quiet trading session in the secondary market, albeit with a bullish tilt. Investors were waiting on the sideline as the Central Bank of Nigeria (CBN) opened N230 billion Treasury bills auction for subscription.
While attentions were shifted towards the main auction, buying interests were also noted, particularly at the long segment (-7 bps) of the curve. Investors’ buying activities in the secondary market dragged average yield downward by 3 bps to settle at 18.08%.
Traders reported that transaction ticket was relatively light, with modest interest noted on short-dated NTBs (Nov/Dec) and a handful of OMO tenors (6-Jan, 17-Feb, 7-Apr).
Only a few transactions cleared, keeping the average benchmark yield above 18%, with the expectation that rejected bids at the primary market auction will filter into the market on Thursday. The CBN auction attracted ₦396.42 billion in total subscriptions, of which ₦303.79 billion was allotted.
Stop rates rose marginally on two tenors: the 91-day paper closed at 15.35% (+35 bps), while the 364-day paper settled at 17.44% (+94 bps). The 182-day rate held firm at 15.50%.
The trading session is likely to see mixed to slightly bearish trading as some investors exit lower-yielding papers following the higher stop rates, while others selectively target more attractive offerings.
Across the curve, the average yield contracted at the short (-1 bp) and long (-7 bps) ends, driven by the demand for the 78-day to maturity (-1 bp) and 302-day to maturity (-24 bps) bills, respectively.
However, yield remained unchanged at the mid-segment in the absence of significant trading activity. Similarly, the average yield contracted by 3 bps to 24.8% in the OMO bills segment. #Treasury Bill Yield Dips, Investors Get Higher Auction Rates Yields on Naira Assets Mixed, Banks Trim T-Bills Holdings
