Market Records Mixed Performance as Rate on T-Bills Slides to 0.4%

Market Records Mixed Performance as Rate on T-Bills Slides to 0.4%

The fixed income market records mixed performance on Thursday as rate on Nigerian Treasury Bills compressed 10 basis points to 0.40% while bonds trade mildly positive.

Commenting on the bullish run at the T-Bills space, analysts at Greenwich Merchant Bank said in a note that lost bids at the Primary Market Auction (PMA) yesterday filtered into the secondary market for T-bills.

This drove a 10 basis points (bps) decline in average yield.

Meanwhile, market data shows that the open market operations (OMO) curve closed flattish at an average of 0.42%.

“At the front end of the curve, we saw a bullish performance in the treasury bills market due to the bullish outcome of the NTB PMA which held yesterday”, Chapel Hill Denham said.

In the money market, funding pressures increased mildly as financial system liquidity opened lower at N557.7 billion from N633.2 billion.

Read Also: Average Rate on Nigerian Treasury Bills Spikes 30 Basis Points

The Central Bank of Nigeria held an OMO auction in which it allotted a total of N60 billion, notwithstanding, interbank funding rates remained stuck at low single-digit.

The Open Buy Back (OBB) and Overnight (OVN) rates rose by 33bps apiece to 1.00% and 1.25% respectively.

“We expect funding pressures to remain benign in the near term, with liquidity likely to be boosted by FAAC inflows (c.N300bn to sub-nationals) in the session ahead”, analysts said.

Similarly, bonds traded flattish as investors remained cautious following the neutral outcome of the bond auction conducted on Wednesday.

Notably, the benchmark bond yield curve was unchanged at an average of 5.38%.

In the primary market, the CBN mopped up liquidity from the system via an OMO auction worth N60.0 billion. 

Apex bank split this across the 96-day (N10.0bn) at 1.6500%, 180-day (N10.0bn) at 4.50% and 362-day (N40.0bn) at 6.0000%.

Stop rates dropped across maturities by an average of 18bps to 4.05%.

The 96-day and 180-day cleared lower by 20bps to 1.65% and 4.50% respectively, while the 364-day cleared lower by 15bps to 6.00%.

In the currency market, traders hinted that the exchange rate traded range bound in official segment.

The pair was unchanged at N379.00 at the official window, while the Naira strengthened marginally against the USD by 0.17% or 67 kobo to N394.00 at the I&E Window.

However, pressures resurfaced in the parallel market, as the Naira weakened further by N2 or 0.4% to N478.00.

Market Records Mixed Performance as Rate on T-Bills Slides to 0.4%