T- Bills Yield Slowdown as Spot Prices Rise
In the market today, the average yields on fixed income instruments recorded mixed results on Wednesday as the Central Bank of Nigeria (CBN) conducted a primary market auction to roll over maturing bills. Yields on Treasury Bills track lower in the secondary market.
However, due to a busy day at the auction, the fixed income market was traded on a cautious note before the auction result is made available. Demand at the auction was strong again.
Consequently, spot prices or rates on short and long-dated treasury bills inched higher to 2.50% and 5.50% while rates on mid tenored bills slow down to 3.44% from previous positions.
In the money market, the average interbank rate dropped off 50 basis points to close at 15.38%, following expansions at both the Open Buy Back rate and Overnight rate.
Data from the FMDQ Exchange platform shows that the repo rate and overnight lending rate close at 15.00% and 15.75% today in the absence of liquidity pressure in the financial system.
In the Nigerian Treasury Bills secondary market, trading activities ended on a calm note as investors focused more on the first primary market auction (PMA) for the year.
Consequently, the average yield shaved off by 4 basis points to close at 4.54%. Transaction of Federal Government if Nigeria (FGN) bond in the secondary market space was quiet. As a result, the average yield retained its prior position to close at 11.88%.
Elsewhere, activities at the FGN Eurobond market traded on mixed sentiments, buying interests were witnessed on the Jun-2022 & Jul-2023 papers, according to Alpha Morgan Capital.
Selling pressures were seen at the Jan-2031, Feb-2032, Jan-49 instruments. In sum, the average yield remained flat to close at 7.08%, Alpha Morgan Capital note indicates.
There was heavy demand at the primary market auction conducted today to roll over maturing bills. The CBN offered N77.61 billion for sale but a total subscription of N113.06 billion was recorded.
Accordingly, the CBN allotted N2.19 billion for the 91-day, N1.46 billion for the 182-day, and N53.90 billion for the 364-day bills.
Stop rates of 2.50% (previously 2.49%), 3.44% (previously 3.49%), and 5.50% (previously 4.90 %). Elsewhere, the average yield on OMO Bills expanded by 3 basis points to 5.6% in the OMO segment.
Traded at N416, the Nigerian local currency, naira, depreciates by 0.02% against the United States dollar at the investors and exporters window. # T- Bills Yields Slowdown as Spot Prices Rise
Read Also: Analysts Expect Investors to Remain Bullish on Treasury Bills
