SAT NOV 23 2024-theGBJournal| Trading in the Treasury bills secondary market was bearish this week as the average yield across all instruments expanded by 24bps to 25.3%.
However, we note that bullish sentiments prevailed in the NTB segment as participants looked to fill unmet bids from the week’s NTB PMA at the secondary market.
The average yield contracted by 12bps to 24.0% at the NTB segment but expanded by 77bps to 27.2% at the OMO segment.
At Wednesday’s NTB auction, the Debt Management Office (DMO) offered bills worth N610.80 billion – N41.89 billion for the 91-day, N28.56 billion for the 182-day, and N540.45 billion for the 364-day bills.
Subscription level settled higher at N1.18 trillion (previous auction: N669.93 billion), with a bid-to-offer ratio of 1.9x (previous auction: 1.3x).
The auction closed with the DMO allotting instruments worth N693.05 billion – N35.41 billion for the 91-day, N16.92 billion for the 182-day, and N640.71 billion for the 364-day papers – at respective stop rates of 18.00% (unchanged), 18.50% (unchanged) and 23.50% (previous: 23.00%).
We expect investors to reprice bills in line with the outcome of the Monetary Policy Meeting (MPC) meeting scheduled for next week (25 and 26 November).
Nonetheless, we highlight the likelihood of renewed demand in the secondary market bolstered by the surplus inflows expected into the financial system next week.
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