SAT MAY 09 2026-theGBJournal|The Treasury bills secondary market closed the week on a bullish note, buoyed by strong system liquidity and sustained investor demand.
As liquidity conditions improved, average yields declined by 5bps week-on-week to 18.8%, reflecting renewed buying interest across the fixed income space.
Activity in the NTB secondary market, however, was mixed.
Investors largely unwound positions ahead of Wednesday’s NTB Primary Market Auction (PMA), resulting in a mildly bearish tone.
In contrast, sentiment in the OMO secondary market remained firmly positive, with average yields compressing by 8bps to 21.0% amid strong demand for short-dated instruments.
At the NTB PMA conducted by the Debt Management Office (DMO), a total of N700.0 billion was offered across the 91-, 182-, and 364-day tenors.
Investor appetite remained exceptionally strong, with total subscriptions surging to N2.41 trillion, translating to a bid-to-offer ratio of 3.4x.
The DMO ultimately allotted N731.75 billion, implying a healthy bid-to-cover ratio of 3.3x. Stop rates settled lower at 15.95% for the 91-day bill, 16.14% for the 182-day bill, and 16.15% for the 364-day tenor, underscoring aggressive demand despite elevated rates.
The Open Market Operations (OMO) segment also witnessed significant investor participation during the week.
At Monday’s OMO auction, the Central Bank of Nigeria (CBN) offered N600.0 billion across the 8- and 134-day tenors. Demand was robust, with subscriptions reaching N1.71 trillion.
The CBN subsequently allotted N1.70 trillion at stop rates of 21.90% and 20.00%, respectively.
Similarly, at Thursday’s OMO auction, the apex bank offered another N600.0 billion across the 33-, 75-, and 96-day maturities. Market demand remained resilient, as total subscriptions climbed to N1.64 trillion.
The CBN eventually allotted N1.60 trillion at stop rates of 21.57%, 20.63%, and 20.45% across the respective tenors, highlighting continued investor preference for high-yield short-term instruments.
Meanwhile, the FGN bond secondary market traded relatively quietly but with a slight bearish undertone, as average yields inched higher by 1bp to 16.1%. Across the benchmark curve, yields expanded at the short end by 12bps, largely driven by selloffs in the MAR-2028 bond, which rose 32bps.
On the other hand, buying interest at the mid and long ends of the curve supported modest yield contractions of 2bps and 1bp, respectively, driven by demand for the APR-2029 and JUN-2038 bonds.
Liquidity conditions in the financial system remained notably strong during the week. The overnight (OVN) rate declined by 11bps week-on-week to 22.2%, supported primarily by inflows from OMO maturities totaling N2.71 trillion.
Consequently, system liquidity improved further, with the average net long position rising to N5.62 trillion from N5.33 trillion recorded in the previous week.
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