…At the money market, the overnight (OVN) rate expanded significantly by 11.56ppts w/w to 31.7% as OMO auction (N459.60 billion) and CRR (N200.00 billion) debits dwarfed OMO maturities (N15.90 billion)
SAT SEPT 07 2024-theGBJournal| In line with our expectations, the Treasury bills secondary market ended the week on a bullish note owing to pockets of post-auction demand from participants who lost out at the Wednesday NTB PMA.
Accordingly, the average yield in the market declined by 103bps to 20.8%. Across the market segments, the average yield dipped by 154bps to 19.7% at the NTB segment and inched lower by 17bps to 22.7% at the OMO segment.
At this week’s NTB auction, the DMO offered participants instruments worth N233.31 billion – N19.61 billion for the 91-day, N10.55 billion for the 182-day and N203.15 billion for the 364-day bills.
Notably, aggregate subscriptions at the auction settled at N1.13 trillion (bid-to-offer: 4.8x), higher than the N1.03 trillion recorded at the previous auction.
Eventually, the Debt Management Office (DMO) rolled over the exact maturing bills worth N233.31 billion – N7.86 billion for the 91-day, N1.99 billion for the 182-day, and N223.46 billion for the 364-day papers – at respective stop rates of 17.00% (previous: 18.20%), 17.50% (previous: 19.20%) and 18.94% (previous: 20.90%).
Meanwhile, the Central Bank of Nigeria (CBN) also conducted an OMO auction on Monday, offering instruments worth N500.00 billion – N25.00 billion for the 85-day, N25.00 billion for the 183-day and N450.00 billion for the 365-day – to investors.
Total subscription settled at N678.00 billion (bid-to-offer: 1.3x), with the CBN allotting N459.60 billion for the 365-day at a stop rate of 21.8% (previous: 21.9%), while the 85-day and 183-day bills made no sales.
At the money market, the overnight (OVN) rate expanded significantly by 11.56ppts w/w to 31.7% as OMO auction (N459.60 billion) and CRR (N200.00 billion) debits dwarfed OMO maturities (NGN15.90 billion), thus, pressuring system liquidity.
Consequently, the average system liquidity settled at a net long position of N198.32 billion (vs a net short position of N622.65 billion in the previous week).
Next week, the OVN rate is likely to remain elevated given that expected inflows from OMO maturities (N32.50 billion) may be insufficient in supporting the system amid a possible net issuance at the NTB auction scheduled for Wednesday.
At the money market, the overnight (OVN) rate expanded significantly by 11.56ppts w/w to 31.7% as OMO auction (N459.60 billion) and CRR (N200.00 billion) debits dwarfed OMO maturities (N15.90 billion), thus, pressuring system liquidity.
Consequently, the average system liquidity settled at a net long position of N198.32 billion (vs a net short position of N622.65 billion in the previous week).
Next week, we envisage the OVN rate will likely remain elevated given that expected inflows from OMO maturities (NGN32.50 billion) may be insufficient in supporting the system amid a possible net issuance at the NTB auction scheduled for Wednesday.
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