OMO, T-Bills Yields Ease as Investors Boost Holdings
The average yield on Nigerian Treasury and OMO bills eased in the secondary market as investors’ appetite for the naira assets increased on Monday. Investors raised bets after mixed trading experiences in the second market last week, supported by excess liquidity conditions in the financial system.
System liquidity fell to N750.31 billion, down from N1.61 trillion in the previous week. The decline was largely driven by CBN’s liquidity management activities, with a total of N2.12 trillion allotted at its auction on Wednesday. This was reflected in the Overnight Rate (OVN), which rose by 10 bps to 27.00%, while the Open Repo Rate (OPR) was unchanged at 26.50%.
After the Treasury bills auction conducted last week, market players booked profits on their winnings. The week ended mixed as investors reassessed yield levels and trade opportunities, TrustBanc Financial Group Limited said in a note.
On Monday, asset managers boosted their portfolio in anticipation of possible absence of the authority in the primary market this week. Demand for Nigerian bills was observed across the curve. Fixed income market said Nigerian treasury bills maturing in NOV-25 papers recorded the most notable yield contraction, inspiring a 3 bps moderation in average yield to close at 17.88%.
Across the curve, the average yield contracted at the short (-7 bps) and mid (-7 bps) segments, driven by demand for the 87-day to maturity (-37 bps) and 101-day to maturity (-73 bps) bills, respectively.
Meanwhile, yield was unchanged at the long end. Similarly, the average yield contracted by 9 bps to 24.5% in the OMO bills segment due to bargain hunting, despite a huge allotment worth N2.12 trillion at the primary market auction last week. #OMO, T-Bills Yields Ease as Investors Boost Holdings# Naira Drops as Data Confirms FX Inflows Declines for Weeks
