SAT APRIL 26 2025-theGBJournal| Treasury bills average yield fell 48bps to 23.8%, underpinned by the strong system liquidity through most of the week and investors looking to fill unmet bids at Wednesday’s PMA.
Across the market segments, the average yield declined by 7bps and 109bps to 20.8% and 27.1% in the NTB and OMO segments, respectively.
At Wednesday’s NTB auction, the Central Bank of Nigeria (CBN) offered bills worth N400 billion – N50 billion for the 91D, N100.00 billion for the 182D, and N250.00 billion for the 364D bills.
Total subscription levels settled higher at N1.54 trillion (previous auction: N1.13 trillion), indicating a bid-to-offer ratio of 3.9x (previous auction: 1.4x).
The auction closed with the CBN over-allotting to the tune of N714.38 billion – N51.37 billion for the 91D, N12.72 billion for the 182D, and N650.28 billion for the 364D papers – at respective stop rates of 18.00% (previous: 18.50%), 18.50% (previous: 19.50%) and 19.60% (previous: 19.63%).
The CBN also conducted an OMO auction Friday (April 25), offering instruments worth N500 billion – N250 billion for the 298D and N250.00 billion for the 319D – to investors.
Total subscription settled at N1.39 trillion (bid-to-offer: 2.8x), with the CBN allotting N1.01 trillion – N319.54 billion for the 298D and N688.30 billion for the 319D.
At the bonds market, the average yield expanded by 1bp to 19.0% while across the benchmark curve, the average yield increased at the short (+2bps) end driven by selloffs of the JAN-2026 (+13bps) bond, while it declined at the mid (-3bps) segment following demand for the FEB-2031 (-14bps) bond. The average yield closed flat at the long end.
The outcome of this month’s FGN bond auction on Monday (28 April) will, expectedly, shape the direction of yields in the secondary market. At the auction, the Debt Management Office (DMO) is set to offer instruments worth N350.00 billion through re-openings of the APR-2029 and MAY-2033 bonds.
Over the medium term, we expect a moderation in bond yields, influenced by two factors – the anticipated dovish monetary policy stance and sustained improvement in demand and supply fundamentals in Q2-25.
The overnight (OVN) rate declined by 518bps w/w to 26.9%, as inflows from FGN bond coupon disbursements (N6.72 billion), contractor payments and FX sales to the CBN outweighed debits from net NTB issuances (N314.38 billion).
Consequently, the average system liquidity improved, settling at a net long position of N1.18 trillion (vs a net long position of N315.77 billion in the previous week).
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