T-Bills Rate Steadies as Sell Pressure Hits FGN Bonds
The average yield on Nigerian Treasury bills was steady on Thursday while sell pressures on Federal Government of Nigeria (FGN) Bonds resulted in a shift in the yield curve amidst pressures on financial system liquidity.
Due to a weak liquidity position in the financial market, the average interbank rate climbed by 16 basis points to close at 15.00%, traders said in their separate notes.
Data from the FMDQ Exchange platform shows that the Open Buy Back rate climbed by 33 basis points to 15% as system liquidity remained depressed closing in a net short position of N144.04 billion.
The overnight lending rate however retained its prior position to close at 15.00%. Today, the secondary market for trading Nigerian Treasury bills stayed calm note following a thin trading session amidst rising spot rates in the primary market auction.
Thus, the average rate remained flat to close at 7.7% while the Central Bank of Nigeria’s last auction for 364-day bills settled at 7.45%. Elsewhere, the average yield expanded by 7bps to 11.2% in the open market operations (OMO bills) segment.
In the FGN bond secondary market, trading activities were cold but with a bearish tilt as sell-side pressure was seen mostly along the longer end of the curve, according to Alpha Morgan Capital. READ: Treasury Bills Yield Steadies as Naira Slides at Official FX Window
Across the benchmark curve, Cordros Capital said the average yield closed flat at the short and mid segments but expanded at the long (+17bps) end as investors sold off the MAR-2050 (+35bps) bond. As a result, the average yield climbed by 7 basis points to close at 12.81%.
Also, the FGN Eurobond space was bearish as sell-side pressures were seen across the sovereign curve. Consequently, the average rate was up by 22bps to close at 11.83%, according to traders’ notes. # T-Bills Rate Steadies as Sell Pressure Hits FGN Bonds
