SAT OCT 05 2024-theGBJournal| Bearish sentiments prevailed in the Treasury bonds secondary market this week following profit-taking activities on short- and long-dated bonds.
Hence, the average yield expanded by 33bps to 19.1%. Across the benchmark curve, the average yield advanced at the short (+59bps), mid (+31bps), and long (+14bps) segments following selloffs of the MAR-2025 (+151bps), JUL-2030 (+86bps), and JUN-2038 (+85bps) bonds, respectively.
Next week, analysts still expect yields to trend upwards, driven by the impact of depressed liquidity in the system and the expectation of higher yields on new issuances.
Meanwhile, Cordros Research analysts tells theG&BJournal that they maintain their medium-term expectation of elevated yields consequent on anticipated monetary policy administration globally and domestically, and sustained imbalance in the demand and supply dynamics.
The Treasury bills secondary market traded on a bearish note due to the tight system liquidity, in line with our expectations.
Thus, the average yield in the market rose by 51bps to 23.1%. Across the market segments, the average yield advanced by 76bps to 22.7% at the T-bills segment and expanded by 13bps to 23.8% at the OMO segment.
Notably, the CBN conducted an OMO auction on Thursday, offering instruments worth N500.00 billion – N25.00 billion for the 89-day, N25.00 billion for the 187-day and N450.00 billion for the 362-day – to investors.
Total subscription settled at N737.14 billion (bid-to-offer: 1.5x), with demand seen only for the 362-Day bill.
Eventually, the CBN allotted N731.14 billion for the 362-Day bill at a stop rate of 24.3% (previous: 24.4%), while no sale was made for the 89-Day and 187-Day bills.
Based on expectation of a liquidity dearth in the coming week, yields in the Treasury bills secondary market are expected to trend higher.
Also, the CBN is scheduled to hold an NTB PMA next Wednesday (09 October), with N81.90 billion worth of maturities on offer.
X-@theGBJournal|Facebook-the Government and Business Journal|email:gbj@govbusinessjournal.com|govandbusinessj@gmail.com
