Yield on T-Bills Sinks 10 Basis Points ahead of CBN Auction
The average yield on Nigerian Treasury bills slumped 10 basis points at the secondary market on Tuesday ahead of the Central Bank of Nigeria (CBN) primary market auction scheduled for midweek.
On Wednesday, the CBN is scheduled to conduct a Primary Market Auction to roll over NT-bills maturities worth ₦98.02 billion across 91-day (₦4.12 billion), 182-day (₦3.75 billion), and 364-day (₦90.15 billion) tenors.
Fixed income market traders expectations about the T-Bills auction are mixed, according to detail gathered by MarketForces Africa analysts. Recall that there were price adjustments on spot rates at the Treasury bills auction conducted.
Meanwhile, money market rates slumped further today in the absence of liquidity pressures in the financial system. According to trading data, the average interbank rate dropped by 700 basis points to close at 5.13%, following contractions at both the Open Buy Back rate and Overnight rate.
On Tuesday, trading data from the FMDQ Exchange platform shows that the Overnight rate decreased by 7.00 per cent to close at 5.25 per cent as against the last close of 12.25 per cent.
Also, the Open Repo (OPR) rate also decreased by 7.00 per cent to close at 5.00 per cent compared to 12.00 per cent on the previous day. Read: Yield Sinks Below 5% After 364-Day T-Bills Spot Rate Falls
Today, the Nigerian Treasury bills secondary market closed on a bullish note as average yield across the curve dipped by 10 basis points at 4.43 per cent from 4.53 per cent on the previous day.
Average yield across the long-term maturities declined by 22 basis points, according to traders note. However, the average yields across short-term and medium-term maturities remained unchanged at 3.52 per cent and 4.05 per cent, respectively.
FSDH Capital said in a note that NTB 11-Aug-22 (-87 bps) maturity bill witnessed buying interest, while yields on 8-day to maturity bills remained unchanged. In the OMO bills market, the average yield across the curve closed flat at 5.68 per cent, FSDH Capital said in a market report.
Traders said the average yields across short-term and long-term maturities remained unchanged at 5.42 per cent and 5.81 per cent, respectively. Also, 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. It was noted that average yield across the short tenor of the curve declined by 1 basis point.
However, the average yield across medium tenor and long tenor of the curve remained unchanged. The 27-APR-2023 and 14-MAR-2024 maturity bonds witnessed mild buying interest with a decrease in the yield of 1 basis point each. #Yield on T-Bills Sinks 10 Basis Points ahead of CBN Auction
