…At the NTB auction, the DMO offered maturing bills worth N161.88 billion – N6.78 billion for the 91-day, N4.92 billion for the 182-day and N150.18 billion for the 364-day bills
SAT SEPT 14 2024-theGBJournal| Trading in the Treasury bills secondary market was bearish this week following profit-taking activities on short- and long-dated bills.
Thus, the average yield across all instruments expanded by 79bps to 21.6%. Across the market segments, the average yield expanded by 62bps to 20.3% at the NTB segment and increased by 92bps to 23.6% at the OMO segment.
At the NTB auction, the DMO offered maturing bills worth N161.88 billion – N6.78 billion for the 91-day, N4.92 billion for the 182-day and N150.18 billion for the 364-day bills.
The subscription level settled lower at N563.17 billion (previous auction: N1.13 trillion), with a bid-to-offer ratio of 3.5x recorded.
The auction closed with the DMO allotting instruments worth N161.88 billion – N10.84 billion for the 91-day, N2.52 billion for the 182-day, and N148.52 billion for the 364-day papers – at respective stop rates of 16.63% (previous: 17.00%), 17.00% (previous: 18.94%) and 18.59% (previous: 18.94%).
We expect that the ample liquidity in the system next week will likely spur demand for instruments, leading to a decline in yields in the secondary market.
The overnight (OVN) rate inched higher by 7bps w/w to 31.7% despite the inflow from OMO maturities (N35.20 billion).
Consequently, average liquidity position remained positive, closing at a net long position of N612.68 billion (vs net long position of N198.32 billion in the previous week).
For next week, we envisage moderation in the OVN rate as we believe the combined inflows of N452.75 billion from FGN bond coupon payments (N442.75 billion) and OMO maturities (N10.00 billion) will boost liquidity in the financial system.
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