SAT MAY 25 2024-theGBJournal| Treasury bills secondary market traded on a bullish note as unmet demand from the mid-week auction filtered into the secondary market.
Consequently, the average yield across all segments declined by 18bps to 21.6%.
Across the market segments, the average yield dipped by 19bps to 22.0% at the T-bills segment and contracted by 15bps to 20.8% at the OMO segment.
At the NTB auction conducted on Wednesday, the apex bank offered instruments worth N508.98 billion – N331.01 billion for the 91D, N9.30 billion for the 182D and N168.67 billion for the 365D bills – to participants.
The auction was hugely contested as the total subscription level settled higher at N1.59 trillion (bid-to-offer: 3.1x | previous auction: N914.05 billion), with more demand skewed towards the longer-dated bill (N1.43 trillion | 90.1% of total subscription).
The auction closed with the CBN allotting instruments worth N638.98 billion – N60.69 billion for the 91D, N28.46 billion for the 182D and N549.83 billion for the 365D papers – at respective stop rates of 16.50% (previous: 16.24%), 17.45% (previous: 17.00%) and 20.69% (previous: 20.70%).
Also, the CBN conducted an OMO auction on Friday, offering bills worth N500.00 billion – N75.00 billion for the 95-day, N75.00 billion for the 179-day and N350.00 billion for the 361-day – to investors.
Demand was healthy as total subscription settled at N1.16 trillion (bid-to-offer: 2.3x), as the CBN allotted all available bids across the three tenors – N10.00 billion for the 95-day, N5.65 billion for the 179-day and N1.14 trillion for the 361-day – at respective stop rates of 19.00% (previous: 18.99%), 19.74% (previous: 19.48%), 22.49% (previous: 21.50%).
Next week, we anticipate yields in the NTB secondary market will likely rise from current levels, given the prospects of tight liquidity conditions in the financial system.
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