SAT, AUGUST 12 2023-theGBJournal |This week, activities in the T-bills secondary market turned bearish. As a result, the average yield across all instruments expanded by 37bps to 7.3%.
At this week’s NTB auction, the apex bank offered instruments worth N153.99 billion – N4.52 billion of the 91-day, N1.32 billion of the 182-day, and N148.15 billion of the 365-day bills – to participants.
Total subscription at the auction settled at N836.29 billion (bid-to-offer: 5.4x), with more demand skewed towards the longer-dated bill (N807.68 billion).
The auction closed with the CBN allotting precisely what was offered at respective stop rates of 5.00% (previously 6.00%), 5.90% (previously 8.00%), and 9.80% (previously 12.15%).
Meanwhile, the CBN conducted its first OMO auction this year (previous auction: Dec 2022). At the auction, participants were offered instruments worth N150.00 billion – NGN30.00 billion for the 96-day, N40.00 billion for the 187-day, and N80.00 billion for the 362-day.
The auction closed with the CBN allotting precisely what was offered at respective stop rates of 10.00% (previously 7.00%), 12.98% (previously 8.50%), and 14.49% (previously 10.10%).
Following our expectations of lower liquidity in the system next week, we anticipate participants’ demand for bills to moderate, resulting in an expansion of yields in the Treasury bills secondary market.
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