SAT. 31 DEC, 2022-theGBJournal| Activities in the Treasury bills secondary market were bullish, as participants looked to the secondary market to compensate for unmet demand at the NTB PMA.
Consequently, the average yield across all instruments contracted by 22bps to 5.0%. Across the segments, the average yield declined by 95bps and 3bp to 3.4% and 5.4% at the OMO and NTB secondary markets, respectively.
At this week’s auction, the CBN offered N67.43 billion – N2.16 billion of the 91-day, NGN17.16 billion of the 182-day, and NGN48.11 billion of the 364-day – in bills.
As in the previous auction, the auction closed with the CBN allotting precisely what was offered at respective stop rates of 2.75% (previously 5.50%), 7.15% (previously 7.30%), and 8.49% (previously 9.89%).
We expect yields to trend lower next week, as investors sustain buying activities in reaction to the moderation in the stop rate of bills at the last primary market auction.
Bonds
This week, the Treasury bonds secondary market continued on a bullish note as the average yield dipped by 3bps to 13.0%.
We attribute this week’s bullish sentiment to investors’ hunting for attractive instruments at the short and long end of the benchmark curve.
Across the benchmark curve, the average yield declined at the short (-3bps) and long (-5bps) ends as investors demanded the MAR-2025 (-17bps) and MAR-2036 (-51bps) bonds, respectively. Meanwhile, the average yield was flat at the mid segment.
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