T-Bills Yield Prints 3.4% as Spot Rates Tumble
Trading in the Nigerian Treasury Bills secondary market was mixed albeit with a bullish bias, as the average yield pared by two basis points to 3.4% after the apex bank primary market auction on Wednesday.
Following a relatively thin trading session across the benchmark curve, the average yield was flat at the short and long ends but contracted at the mid (-7bps) segment as market participants’ demand for the 168 day to maturity (-41bps) bill.
At the primary market auction conducted yesterday, the Central Bank of Nigeria (CBN) offered N94.00 billion for sale with a total subscription of N482.90 billion.
The auction result shows that CBN allotted N2.32 billion of the 91-day, N21.29 billion of the 182-day and N212.92 billion of the 364-day bills – at respective stop rates of 1.75% (from 2.24%), 3.28% (from 3.30%), and 4.10% (from 4.35%).
Elsewhere, traders at Cordros Capital said in a market note that the average yield was flat at 3.9% at the open market operation (OMO bills) segment. READ: Federal Govt. of Nigeria Bond Yield Prints at 12.37%
In the money market, the average interbank rate climbed by 29 basis points on Thursday to close at 4.67% as funding pressures impacted the overnight lending and open buy back rates.
Traders’ notes show that the overnight lending rate expanded by 8 basis points to 4.8% following outflows for net Nigerian Treasury Bills issuances worth N142.53 billion.
Also, the Open Buy Back rate dipped 50 basis points to 4.50% due to liquidity strained in the financial system. Amidst seesaw trading pattern in the fixed income segment, activities at the FGN bond secondary market was bearish as there was traction on the 2027s, 2036s, 2042s, 2049s, and 2050s maturities.
As a result of the sell-down, the average yield climbed by 11 basis points to close at 10.48%.
Today, activities at the FGN Eurobond market sustained the bullish trend from the previous session as there was a moderate demand across all ends of the curve. In sum, the average yield was down by 42 basis points to close at 7.95%. #T-Bills Yield Prints 3.4% as Spot Rates Tumble
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