Yield Stays Flat on Subdued Appetite in T-Bills Market

Yield Stays Flat on Subdued Appetite in T-Bills Market

Investors appetite remained subdued in the Treasury bills (T-Bills) market as rate closed flat at 0.1% for the second consecutive session this week and the third session since Friday.

Meanwhile, analysts at Greenwich Merchant Bank hinted that the financial system liquidity opened robust at ₦257.31 billion.

This represents an uptick of +29.5%, buoyed by open market operations (OMO) repayment worth ₦341.10 billion.

Against this backdrop, funding rates eased, with Open Buy Back and Over Night rate closing at 0.8% and 1.0% apiece from 1.1% and 1.4%.

Similar to the T-bills space, the OMO market activity was muted.

Analysts at Greenwich said in a note that the only yield movement was seen on 15-Dec-20 instrument (-1bp).

As a result, the average yield held firm at 0.1%.

Elsewhere, Bond yields ticked up as bullish sentiment permeated the market.

Across the curve, the short segment compressed by 17bps, the mid-segment dipped 3bps, while the long end of the market closed flat.

Overall, the yield curve dipped 6bps to average 3.8%.

It was however noted that the Nigeria’s local currency, Naira strengthened against dollar on Tuesday.

The Naira appreciated by ₦10.00/USD to close at ₦490.00/USD in the Parallel FX market from its year high of ₦500.00/USD.

Greenwich recalled that on Monday the Central Bank of Nigeria, in a bid to improve FX liquidity, reviewed procedures for receipt of diaspora remittance.

The review was to give recipients of USD diaspora inflow the option of receiving their funds in foreign currency cash (US Dollars) or into their ordinary domiciliary account.

Read Also: Fixed Income Market: Bullish Sentiment Drives Bond Performance

The Apex bank also clarified that ordinary domiciliary account holders will be allowed unfettered and unrestricted use of their funds for eligible transactions.

This will happen where accounts are funded by electronic/wire transfer.

At the Investors and Exporters FX window, the Naira exchanged hands at ₦394.00/USD, ₦3.75/USD higher than its previous close of ₦390.25/USD.