Investors Raise Bets on Nigerian Treasury Bill, Yield Sinks
Fixed interest securities investors increased their buying appetites for the Nigerian Treasury bills in the secondary market amidst the primary market auction.
Trading activity was in the secondary market was relatively calm as participants concentrated more on the primary market auction conducted to refinance maturing bills on Wednesday.
Analysts predicted liquidity strain in the market to impact subscription level at the auction conducted by Debt Management Office (DMO) on behalf of the Central Bank of Nigeria (CBN) as part of efforts to mop up liquidity from the economy.
The short term interest rates were adjusted upward again, according to data from the FMDQ platform as system liquidity remained negative.
Thus, the Open Repo Rate (OPR) increased by 8 bps to 32.10%, while the Overnight Rate (O/N) expanded by 21 bps to 32.576%. Due to buying momentum experienced today, the average yield contracted by 3bps to 23.5%, according to Cordros Capital Limited.
The investment firm said in its report that the average yield declined at the short (-1bp), mid (-1bp), and long (-5bps) segments. Traders associated the yield contraction to investors interests in the 78-day to maturity, causing its associated yield to bump by 1bp.
The market also witnessed demand for 169 day to maturity bills whose yield dipped by -1bp while interest in 316-day to maturity caused its associated yield to decline by -41bps. Similarly, the average yield dipped by 2bps to 24.3% in the OMO segment.
“We expect tomorrow’s session to be partly impacted by the NTB auction result and partly driven by the tightness in system liquidity,” AIICO Capital Limited told investors in a note. #Investors Raise Bets on Nigerian Treasury Bill, Yield Sinks Banks Stocks Face Selloffs, NGX Sees Intraday Loss
