SAT, JUNE 24 2023-theGBJournal |Bearish sentiments persisted in the Treasury bills secondary market this week, despite the ample system liquidity as players took profits on holdings, which caused an expansion in yields at the short end of the curve, particularly on the 63DTM (+379bps) and 77DTM (+162bps) bills.
As a result, the average yield across all instruments increased by 17bps to 6.5%.
Following the expected inflows into the system next week, we envisage higher demand for T-bills, which will lower yields in the secondary market.
Nonetheless, we expect market participants’ focus to be shifted to the NTB PMA holding on Wednesday (28 June), with the CBN expected to roll over N187.11 billion worth of instruments.
At the Money market, the overnight (OVN) rate dipped significantly by 870bps w/w to close at 3.4%, fueled by the healthy system liquidity.
Notably, the average liquidity level for the week settled higher at a net long position of NGN755.96 billion (vs NGN170.00 billion in the previous week).
We expect the OVN rate to remain depressed next week as we believe the inflow from FAAC allocations (NGN484.27 billion) will be sufficient to support system liquidity.
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