Nigerian Treasury Bills Trading Slows after Rates Slump
In the secondary market for Nigerian Treasury bills, trading activity was inactive as investment managers began to weigh market direction to design portfolio strategy for 2024.
MarketForces Africa reported that the average yield on treasury bills settled at 6.16% on Thursday amidst expectations that Nigeria’s inflation rate for December would be increased.
At the latest primary market auction held last week Wednesday, the CBN offered N67 billion but allotted N317 billion to market participants.
The stop rates changed across the three tenors; the 91-day bill was sold at 7.00% from 6.25%, the rate on 182-day bill declined to 10.00% from 11.00% and 364-day bills was priced down to 12.24% from 13.50%.
In the money market, short-term rates declined as liquidity pressure in the financial system eased. According to data from FMDQ, the overnight lending rate contracted by 167 basis points to 14.3%.
Analysts attributed the decline to the absence of any significant outflows. Trading in the NTB secondary market was quiet, as the average yield closed flat at 6.2%.
Market analysts at Cordros Capital Limited said in a note that the average yield was unchanged at 10.9% in the open market operation (OMO bills) segment. British Private Sector Economy Expands in December –PMI
Elsewhere, proceedings in the Treasury bond secondary market were bullish, as the average yield contracted by 2bps to 13.9%, according to separate investment report reviewed by MarketForces Africa.
Across the benchmark curve, the average yield closed flat at the short end but declined at the mid (-10bps) and long (-1bp) segments as investors demanded the APR-2032 (-15bps) and JAN-2053 (-7bps) bonds, respectively.
Key money market rates, including the open repo rate (OPR) and overnight lending rate (OVN), witnessed declines, closing at 13.71% and 14.33%, respectively.
