FRI, APRIL. 21 2023-theGBJournal | Activities in the Treasury bills secondary market were mixed, albeit with a bullish bias, following the tepid demand for bills due to the depressed liquidity levels.
As a result, the average yield across the market dipped by 3bps to 8.5%. Across the market segments, the average yield contracted by 3bps to 8.8% in the NTB secondary market and was flat in the OMO segment at 4.0%.
Next week, we envisage lower yields in the Treasury bills secondary market as we believe the liquidity surfeit in the financial system will drive demand.
In addition, we expect market focus to be shifted to the NTB PMA holding on Wednesday (26 April), where the CBN is scheduled to roll over N131.46 billion worth of maturities.
Meanwhile, this week, the overnight (OVN) rate satyed elevated at 19.0%, as the liquidity in the system remained low. For clarity, debits for the FGN bond auction (N552.47 billion) overshadowed the inflow from FGN bond coupon payments (NGN46.44 billion).
As a result, the average system liquidity closed at a net short position of N338.33 billion (vs. a net short position of N176.33 billion in the previous week).
Next week, we believe the financial system will be saturated with liquidity given the expected inflows from the maturing APR-2023 bond (N735.96 billion), FAAC disbursements (N438.49 billion) and FGN bond coupon payments (N178.50 billion). Hence, we envisage a decline in the OVN rate.
Twitter-@theGBJournal|Facebook-the Government and Business Journal|email:gbj@govbusinessjournal.ng| govandbusinessj@gmail.com
