SAT 20 NOV, 2021-theGBJournal- Bullish trading sentiments persisted in the Treasury bills secondary market still on the back of declining primary market offer rates in the NTB segment and as foreign investors increased their OMO portfolio.
As a result, the average yield across all instruments contracted by 11bps to 5.3%. Across the market segments, the average yield declined by 14bps and 8bps to 5.5% and 5.1% at the OMO and NTB segments, respectively.
In the coming week, we expect the outcome of the NTB auction to shape the direction of yields in the T-bills market. At the auction, the CBN is set to roll over NGN118.73 billion worth of maturities to market participants.
Meanwhile, the overnight (OVN) rate expanded by 475bps w/w to 20.0% this week, in light of the funding pressures for the November bond auction settlement (NGN225.25 billion), CBN’s weekly OMO (NGN25.00 billion) and FX auctions that offset the sole inflow from OMO maturities (NGN70.50 billion).
Next week, we envisage the OVN would remain elevated in the double-digit region as expected debits for CRR, possible net NTB issuances and CBN’s weekly auctions inflows are likely to offset expected inflows from FAAC disbursements, OMO maturities (NGN33.00 billion) and FGN bond coupon payments (NGN17.87billion).
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