Treasury Bills Trade Quiet Ahead of Auction
The average yield on Nigerian Treasury bills swung sideways ahead of the Central Bank of Nigeria’s (CBN) midweek primary market auction. Despite swing across financial markets, bill buying or even selling have been halted in the secondary market while the inflation threat on investment persists.
The National Bureau of Statistics (NBS) is expected to release Nigeria’s headline inflation figure for May 2023 on Thursday. By analysts’ consensus, the consumer price index would worsen due to the effects of fuel subsidies.
In separate market reports, traders said trading activities in the Treasury bills secondary market was muted, as the average yield was unchanged at 6.3%.
There was solid liquidity in the market, which some market or fixed income securities analysts estimated to push the subscription level upward at the midweek auction by Nigeria’s debt management office.
The financial system opened the week on a relatively buoyant note, with a liquidity balance estimated at ₦330 billion surplus, according to market analysts and fixed income securities traders at TrustBanc Capital Limited.
In their note to investors, analysts at Cowry Asset Management said the Nigerian Inter-Bank Offered Rate fell across most tenor buckets as liquidity conditions eased and banks with liquidity sought lower rates.
However, the short-term benchmark rates, such as the open repo rate (OPR) and the overnight lending rate (OVN), expanded 20 basis points apiece to 11.90% and 12.30% respectively.
TrustBanc Capital Limited said in its note that the yield on the Apr-24 bill traded flat at 7.79%, given the absence of significant trades throughout the trading session. Elsewhere, Nigerian local currency appreciated as the market savours the suspension of Godwin Emefiele as the CBN Governor.
#Treasury Bills Trade Quiet Ahead of Auction