SAT, DEC 16 2023-theGBJournal| The Treasury bills secondary market stayed bullish through the week as the average yield across the market dipped by 263bps w/w to 8.7%.
We attribute this week’s performance to auction participants moving to the secondary market to cover for lost bids at the primary market auction (PMA) on Wednesday, and players cherry-picking instruments with attractive yields.
Across the market segments, the average yield declined by 272bps to 8.3% in the NTB secondary market and contracted by 166bps to 12.9% in the OMO segment.
At this week’s NTB auction, the Debt Management Office (DMO) offered instruments worth N13.58 billion – N1.10 billion for the 91-day, N1.28 billion for the 182-day, and N11.20 billion for the 364-day.
The auction was hugely contested as the total subscription level settled at N1.57 trillion (bid-to-offer: 115.7x vs. previous auction: 16.9x).
Eventually, the DMO over-allotted bills worth N263.58 billion – N728.00 million for the 91-day, N6.35 billion for the 182-day, and N256.51 billion for the 364-day – at respective stop rates of 6.25% (previously: 9.00%), 11.00% (previously: 13.00%), and 13.50% (previously: 15.75%).
Next week, we anticipate yields in the T-bills secondary market will likely trend upwards following our expectations of a still tight financial system.
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