T-Bills Yield Slides 7bps as Spot Rate on 364-Day Falls
The fixed income market sees moderate movements around the yields curve across Treasury, Bonds and Open Market Operations (OMO) as the spot rate on 364-day bills falls at the Central Bank of Nigeria (CBN) auction.
The auction was heavily oversubscribed, dragging spot rates on long-dated Nigerian Treasury bills downward while spot prices were steady at the low and mid-end of the Treasury offered for sale.
Meanwhile, as investors were focused on the T-bills auction that was conducted today by the apex bank, traders and other participants at the fixed income market continue to play around, searching for better returns in a tight market.
In the secondary market, trading activities on the Nigerian Treasury Bills was relatively bullish as the average yield contracted by seven basis points (7bps) to 4.2 per cent due to sell down.
Across the Treasury curve, the average yield contracted at the short (-24bps) end following investors’ demand for the 50 –day to maturity (-141bps) bill; but closed flat at the mid and long segments, according to traders note from Cordros Capital.
At the NTB primary market auction, the CBN offered N98.01 billion for sale with a total subscription of N446.31 billion.
Accordingly, the CBN allotted N1.91 billion for the 91-day, N1.82 billion for the 182-day and N211.23 billion for the 364-day T-bills at their respective stop rates of 2.48%, (previously 2.48%), 3.30% (previously 3.30%), and 5.20% (previously 5.40%).
At the money market, short term rates slide further, falling to a single-digit low again due to robust financial system liquidity. The average interbank rate dropped by 263 basis points to close at 2.50%, following contractions at both the Open Buy Back rate and Overnight rate.
Data from FMDQ Exchange shows that the Overnight rate decreased by 2.42 per cent to close at 2.83 per cent as against the last close of 5.25 per cent. Also, the Open Repo (OPR) rate decreased by 2.83 per cent to close at 2.17 per cent compared to 5.00 per cent on the previous day.
In the OMO bills market, the average yield across the curve closed flat at 5.67 per cent. Average yields across short-term and long-term maturities remained unchanged at 5.42 per cent and 5.81 per cent, respectively.
FGN bonds secondary market closed on a flat note today, as the average bond yield across the curve closed flat at 11.52 per cent, FSDH Capital note shows. The average yields across short tenor and long tenor of the curve declined by 1 basis point each.
However, the average yield across the medium tenor of the curve increased by 1 basis point. #T-Bills Yield Slides 7bps as Spot Rate on 364-Day Falls
