SAT, JULY 01 2023-theGBJournal |Proceedings in the Nigerian Treasury bills secondary market turned bullish this week, as the healthy liquidity in the system triggered demand for bills across the spectrum. As a result, the average yield contracted by 11bps to 6.4%.
At this week’s NTB auction, the CBN offered bills worth N187.11 billion-N1.75 billion of the 91-day, N17.16 billion of the 182-day, and N168.21 billion of the 364-day-to market participants.
Demand was higher, especially for the 364-day T-bills, as the total subscription settled at N753.47 billion (vs N286.13 billion in the previous auction).
Eventually, the CBN allotted precisely what was offered at respective stop rates of 2.87% (previously 4.89%), 4.37% (previously 5.12%), and 6.23% (previously 8.24%).
In the coming week, Cordros Research say they expect yields in the NTB secondary market to remain at current levels, given our expectation of buoyant system liquidity.
Also, the Treasury bonds secondary market closed the week on a bullish note, as investors continued to cherry-pick attractive bonds supported by the high system liquidity.
Consequently, the average yield across all instruments contracted by 80bps to 13.0%. Across the benchmark curve, the average yield dipped at the short (-83bps), mid (-122bps) and long (-43bps) segments, following bargain hunting in the MAR-2025 (-161bps), NOV-2028 (-148bps) and JUN-2053 (-97bps) bonds, respectively.
”We retain our view that frontloading of significant borrowings for the year by the FG will result in an uptick in bond yields, as investors demand higher yields in the face of elevated supply.” says Cordros.
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