SAT 09 OCT, 2021-theGBJournal- The Treasury bills secondary market closed the week on a bearish note as the average yield across all instruments expanded by 7bps to 5.9%.
Across the market segments, the average yield expanded by 15bps to 6.5% at the OMO segment. Elsewhere, it pared by 1bp to 5.3% at the NTB segment as local banks invested idle funds in the higher-yielding long-dated NTB instruments.
We envisage the yield on T-bills will settle lower in the coming week, as investors improve buying activities with limited offers in light of significantly lower net issuances at the past few auctions.
Also, we expect quiet trading in the first few days at the NTB segment as participants position for the mid-week PMA, with the CBN set to roll over NGN121.66 billion worth of maturities.
At the money market, the overnight (OVN) rate contracted by 125bps w/w to 14.5% in the absence of significant funding pressures to offset the positive average liquidity position (NGN62.59 billion) during the week.
We expect tighter system liquidity in the coming week, as anticipated debits for CRR and CBN’s weekly auctions are likely to outweigh inflows from OMO maturities (NGN112.00 billion).
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