SAT JAN 11 2025-theGBJournal| The Treasury bills secondary market closed bearish this week as the average yield rose by 8bps to 26.3%.
However, the market segments recorded different sentiments underpinned by several factors.
At the NTB segment, the average yield declined by 24bps to 25.2%, driven by the buoyant system liquidity and the anticipation of lower yields at the NTB auction.
At the OMO segment, the average yield expanded by 65bps to 27.8% as market participants sold off bills to participate in the OMO auction.
At Wednesday’s NTB auction, the Debt Management Office (DMO) offered bills worth N515.00 billion – N50.00 billion for the 91D, N80.00 billion for the 182D, and N385.00 billion for the 364D bills.
Subscription level settled significantly higher at N1.52 trillion (previous auction: N663.18 billion), with a bid-to-offer ratio of 3.0x (previous auction: 2.0x).
The auction closed with the DMO allotting exactly what was offered – N21.30 billion for the 91D, N20.49 billion for the 182D, and N473.21 billion for the 364D papers – at respective stop rates of 18.00% (unchanged), 18.50% (unchanged) and 22.62% (previous: 22.90%).
Also, the Central Bank of Nigeria (CBN) held the first OMO auction of the year on Monday, offering instruments worth N500.00 billion – N250.00 billion for the 350D and N250.00 billion for the 364D – to investors.
Total subscription settled at N1.56 trillion (bid-to-offer: 3.1x), with the CBN allotting exactly what was offered – N150.00 billion for the 350D and N350.00 billion for the 364D at respective stop rates of 23.8%.
Based on our expectation of surplus liquidity in the coming week, we expect yields in the Treasury bills secondary market to trend lower.
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