Average Yield on T-Bills Drops as Market Trades with Bullish Bias

Average Yield on T-Bills Drops as Market Trades with Bullish Bias

Average Yield on Nigerian Treasury Bills (T-Bills) plunged on Wednesday as fixed income market traded with a slight bullish bias.

At the front end of the curve, discount rates across the Nigerian Treasury Bills benchmark curve eased by an average of 21 basis points (bps) to 0.97%.

Chapel Hill Denham attributed the development to a renewed interest in intermediate and long date to maturities (DTMs) bills.

It would be recalled that fixed income market investors had recently show apathy towards long dated bill as they scramble for higher returns.

However, the open market operations (OMO) curve closed flattish at an average of 2.08%.

Meanwhile, funding pressures increased slightly even as financial system liquidity opened higher at N229 billion from N214 billion yesterday.

The Open Buy Back (OBB) and Overnight (OVN) rates rose by 175bps and 183bps to 11.25% and 11.50%respectively.

Greenwich Merchant Bank said, “Informed by the trend this week, we posit that funding rates might remain elevated, should apex bank mop up liquidity in subsequent sessions”.

“Barring a cash reserve ratio (CRR) debit by the Central Bank of Nigeria (CBN), we expect funding rates to ease slightly in subsequent sessions”, Chapel Hill Denham said.

In the bond market, yields moderated by an average of 4 bps across the benchmark curve to 8.71%.

The moderation across the curve was attributed to repricing at the short (-1bp to 6.13%), intermediate (-5bps to 8.83%) and long (-5bps to 10.07%) end of the curve.

In the currency market, the Nigerian local currency, naira, weakened marginally against the US dollar in the Investors and Exporters Window by 0.13% or N0.50 to 395.50.

Despite rising oil prices, parallel market premium remained wide, as the naira-dollar pair traded flat at 480.00 in the segment as external reserves stood at US$36.20 billion.

At Record Low, T-Bill Rate Positive for FG Refinancing, Equities

Average Yield on T-Bills Drops as Market Trades with Bullish Bias