SAT 26 FEB, 2022-theGBJournal- Trading in the Treasury bills secondary market ended the week on a bullish note, as market participants reacted to declining marginal rates at recent auctions.
Consequently, the average yield across all instruments fell by 65bps to 3.8%. Across the market segments, the average yield contracted by 67bps to 4.6% at the OMO segment following reinvestment of this week’s maturing bills.
At this week’s OMO auction, the Central Bank of Nigeria (CBN) offered and allotted NGN100.00 billion worth of OMO bills to participants and maintained stop rates across the three tenors (96DTM – 7.0%, 180DTM – 8.5% and 362DTM – 10.1%), as with prior auctions. Similarly, the average yield at the NTB segment moderated by 58bps to 3.8% as unmet demand from the NTB auction filtered into the secondary market.
At the NTB auction, the CBN offered NGN115.28 billion for sale with a total subscription of NGN602.65 billion. Eventually, the CBN allotted NGN258.01 billion – NGN5.36 billion of the 91-day, NGN11.03 billion of the 182-day and NGN241.61 billion of the 364-day bills – at respective stop rates of 2.24% (previously 2.48%), 3.30% (unchanged), and 4.35% (previously 5.20%).
We expect yields to trend lower further next week, as investors sustain buying activities in reaction to the moderation in the stop rate of the one-year paper at the last primary market auction.
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