T-Bills Investors See Steady Yield After Quiet Trading Activities
Closed at 5.33 per cent on Monday, the average yield remains steady in the Treasury bills secondary market as investors’ trade cautiously and quietly following a strong rally in the equity segment.
Moderation in headline inflation has continued to reduce the negative real return on treasury bills and other fixed income instruments, though the gap remains steep.
Consensus analysts expect Nigeria’s inflation to see a further decline in October reading as the National Bureau of Statistics prepare to issue data.
With a better liquidity position, subscription at the primary market has been strong, according to records of the past issuance leading to a slowdown in spot rate on 364-day bills.
In the money market, short term rates continue tempering due to the better liquidity position available. Data from FMDQ Exchange shows that the average interbank rate dropped 719 basis points to close at a single digit low of 5.00 per cent.
The decline follows a 725 basis points contractions in Open Buy Back rate while overnight lending rate plunged 713 basis points to close at 4.75 per cent and 5.25 per cent, respectively.
Today, activities at the Nigerian Treasury bills secondary market traded on a calm note again, according to Alpha Morgan Capital analysts. Consequently, the average yield sustained its prior position to close at 5.33 per cent.
Across the benchmark curve, Cordros Capital hinted that the average yield was unchanged at the short and mid segments but contracted at the long (-1bp) end following market participants’ demand for the 290 days to maturity (-3bps) bill.
Similarly, the average yield at the open market operations (OMO) segment remained flat at 6.1 per cent as the fixed income market remains unimpressive.
Also, the Federal Government bond secondary market was also mixed with a bullish bias, as the average yield stayed steady at 11.30 per cent.
The short end of the curve dropped slightly by 1bps while mid and long tenors climbed by 11bps and 3bps respectively due to investors’ demand for the APR-2023 and APR-2037 bonds, respectively.
Then, activities at the Eurobond market traded on calm to bullish note following buying interest across the curve except the Jun-2022 instrument the saw some selloffs.
In the FGN Eurobond market, the average yield dipped by 7 basis points to close at 6.57 per cent as the naira depreciated by 0.06 per cent against the U.S. Dollar at the Investors and Exporters foreign exchange window to close at N414.55. #T-Bills Investors See Steady Yield After Quiet Trading Activities
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