Yields to stay calm amidst CBN rollover of N108.13bn T-bills maturities

THERE are  anticipations that yields in the secondary market will stay relatively calm in the coming week, as market participants trade cautiously in the market ahead of the forthcoming Treasury Bills Primary Market Auction where the CBN plans to rollover maturity Nigerian Treasury Bills worth N108.13 billion across the 91-day, 182-day and 364-day tenors.

The treasury bill market closed the week bearish, with sell pressure seen from May-24 to September 24 tenors. Hence, the average benchmark yield rose by 889 basis points (bps) week-on-week to 6.37 percent.

The Open Market Operation (OMO) bills market witnessed mild buying interest last week, nudging the yield by 25bps week-on-week to 12.06 percent.

Market participants said the buoyant liquidity mildly supported the primary bond auction held last week, with the total subscription at N383.11 billion, higher than the N360 billion offered.

Investors’ appetite for the monthly bond auction has been on a decline since third quarter (Q3) 2023 as inflation maintains an upward trajectory.

Across the four tenors, only the June 2053 tenor recorded subscriptions above the N90 billion offer at N250 billion while others had below.

Eventually, the DMO sold N340.76 billion below the total subscriptions. Compared to the September auction, the stop rates increased to 14.90 percent, 15.75 percent, 15.80 percent and 16.60 percent for 2029, 2033, 2038, and 2053 respectively.

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