SAT. 24 DEC, 2022-theGBJournal| This week’s buoyant system liquidity triggered the bullish performance in the Nigerian Treasury Bills secondary market as participants looked to invest idle cash.
Consequently, the average yield across all instruments contracted by 342bps to 5.2%. Across each segment, the average yield dipped by 578bps and 283bps to 4.3% and 5.4% at the OMO and NTB secondary markets, respectively.
For the coming week, we believe yields for T-bills will increase in the secondary market following the anticipated liquidity squeeze next week.
Notwithstanding, it is believed that the outcome of the NTB PMA scheduled to hold next week, where the CBN is set to roll over N67.43 billion maturities, will influence the sentiments in the secondary market.
Bonds
Also, the bulls prevailed in the Treasury bonds market this week, as investors continued to take positions in bonds with attractive yields across the short and long spectrum. Hence, the average yields across all instruments contracted by 40bps to 13.1%.
Across the benchmark curve, the average yield declined at the short (-71bps), mid (-26bps), and long (-37bps) segments due to demand in the APR-2023 (-255bps), APR-2032 (-49bps), and JAN-2042 (-88bps) bonds, respectively.
Cordros Research say they will maintain their 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.
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