SAT. 07 JANUARY, 2023-theGBJournal| The buoyant liquidity in the system continued to trigger bullish sentiments in the Treasury bills secondary market, with local banks having to sterilize idle cash to avoid excess CRR debit this week.
Consequently, the average yield across the market contracted by 158bps to 3.4%. Across the market segments, the average yield at the NTB segment declined by 197bps to 3.4% but was flat at the OMO segment at 3.4%.
We expect the outcome of the upcoming NTB auction to shape the direction of yields in the T-bills market next week. At the auction, the CBN is set to roll over NGN56.93 billion worth of maturities to market participants.
Similarly, trading in the FGN bonds secondary market opened this year on a bullish note as investors continued to take positions in attractive positions across the curve while anticipating the release of the Q1-23 bond issuance calendar.
Accordingly, the average yield dipped by 36bps to 12.7%.
Across the benchmark curve, the average yield contracted at the short (-80bps), mid (-34bps), and long (-2bps) segments following demand for the APR-2023 (-161bps), NOV-2029 (-44bps) and APR-2049 (-16bps) bonds, respectively.
In the short term, we expect FGN bond yields to oscillate around current levels, pending the publication of the FGN bond issuance calendar for Q1-23.
Notwithstanding, we maintain our view of an uptick in bond yields in the medium term, as the FGN’s borrowing plan for 2023FY and expected fiscal deficit point towards an elevated supply.
Twitter-@theGBJournal|Facebook-The Government and Business Journal|email:gbj@govbusinessjournal.ng|govandbusinessj@gmail.com
