…Across the market segments, the average yield advanced by 42bps to 23.1% in the NTB segment and increased by 192bps to 25.7% in the OMO segment
SAT OCT 12 2024-theGBJournal| Treasury bills average yield across all instruments expanded by 115bps to 24.3% at the end of Friday’s trading session, as bearish sentiments persisted in the market this week.
Liquidity dearth in the financial system played a major role as it continues to undermine demand for instruments.
Across the market segments, the average yield advanced by 42bps to 23.1% in the NTB segment and increased by 192bps to 25.7% in the OMO segment.
At the bi-weekly NTB auction, the Debt Management Office (DMO) offered N81.90 billion worth of instruments to investors – N28.47 billion for the 91D, N22.67 billion for the 182D and N30.76 billion for the 364D bills.
Aggregate subscription settled lower at N271.87 billion (bid-to-offer: 3.3x), compared to the previous auction (N304.27 billion | bid-to-offer: 1.3x).
Eventually, the DMO allotted exactly the amount offered – N12.96 billion for the 91-day, N3.91 billion for the 182-day and N65.03 billion for the 364-day papers – at respective stop rates of 17.00% (unchanged), 17.50% (unchanged) and 19.86% (previous: 20.00%).
Also, the Central Bank of Nigeria (CBN) also conducted an OMO auction on the 11th of October, offering instruments worth N300.00 billion – N25.00 billion for the 95D, N25.00 billion for the 179D and N250.00 billion for the 361D – to investors.
Total subscription settled at N908.23 billion (bid-to-offer: 3.0x), with the CBN allotting N905.23 billion for the 361D at a stop rate of 24.3% (unchanged), while no sales were made of the 95D and 179D bills.
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, as participants in the market look to fulfil their funding needs.
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