SAT SEPT 28 2024-theGBJournal| The Treasury bills secondary market turned bearish this week, as the market reacted to the hike in the benchmark interest rate.
As a result, the average yield across all instruments expanded by 45bps to 25.1%.
Across the market segments, the average yield increased by 34bps to 25.2% in the T-bills segment and rose by 64bps to 25.0% in the OMO segment.
At this week’s NTB auction, the Debt Management Office (DMO) offered N227.54 billion – N28.15 billion for the 91-day, N25.58 billion for the 182-day, and N173.81 billion for the 364-day bills – worth of instruments to investors.
Aggregate subscription settled lower at N304.27 billion (previous: N563.17 billion), with a bid-to-offer of 1.3x.
The auction closed with the DMO allotting exactly what was offered at respective stop rates of 17.00% (previous: 16.63%), 17.50% (previous: 17.00%) and 20.00% (previous: 18.59%).
Meanwhile, the Central Bank of Nigeria (CBN) also conducted an OMO auction on Thursday, offering instruments worth N500 billion – N75.00 billion for the 96-day, N75.00 billion for the 194-day and NGN350.00 billion for the 362-day – to investors.
Total subscription settled at N252.90 billion for the 362-day, while no demand was seen for the 96-day and 194-day tenors.
Eventually, the CBN allotted exactly the demanded amount at a stop rate of 24.36% (previous: 21.80%).
Based on our expectation of a possible liquidity deficit in the coming week, we expect yields in the Treasury bills secondary market to trend higher.
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