MON, NOV 27 2023-theGBJournal|The Nigerian Treasury bills traded on a mixed note as the average yield was unchanged at 10.5%.
Across the curve, the average yield contracted at the short (-26bps) and long (-1bp) ends, following buying interest in the 87DTM (-102bps) and 332DTM (-2bps) bills, respectively.
Conversely, the average yield expanded at the mid (+18bps) segment as investors sold off the 101DTM (+144bps) bill. Elsewhere, the average yield contracted by 2bps to 14.7% in the OMO segment.
Last week, at the primary market for Treasury Bills, the CBN rolled over bills worth N211.71bn (US$266.34m) across the 91-, 182-, and 364-day maturities.
The offer was oversubscribed by N1,019.43bn with a bid to offer of 5.82x (versus 2.82x at the last auction).
Total sales at the auction settled at N561.71bn (net issuance of N350.00bn, bid-to-cover of 2.19x). Stop rates for the 91-day and 182-day maturities rose by 100 basis points each to 8.00% and 12.00% respectively; while the stop rate for the 364-day maturity remained unchanged at 16.75%.
We think that the oversubscription was due to fund managers selling long-dated bonds in order to buy short-dated T-bills.
Activity in the secondary market for Treasury Bills reflected a bullish mood last week as average yields declined 225 basis points to 10.50% pa.
Across the spectrum, average yields at the short-end declined by 134 basis points to 6.86%, the mid-end declined by 165 basis points to 9.11%, while the long-end fell by 232 basis points to settle at 12.93%.
Meanwhile, trading activities in the Treasury bond secondary market were bullish, as the average yield declined by 5bps to 15.9%.
Across the benchmark curve, the average yield contracted at the short (-18bps) end as players demanded the MAR-2024 (-93bps) bond. On the other hand, the average yield was flat at the mid and long segments.
Sell-offs on longer-dated FGN bonds drove yields up last week as investors sought to take advantage of increased yields on shorter-dated instruments. Average yields in the
secondary market for FGN bonds rose 18 basis points to 15.91% pa.
last week. At the mid and long ends of the yield curve, average yields rose by 55 and 15 basis points, respectively, while buying interest, especially on the March 2024 (-193bps) bond drove the average yield at the short-end of the curve down by 25 basis points to 14.21%.
The overnight lending rate contracted by 533bps to 24.6%, in the absence of any significant inflow into the system.
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