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Market | Bonds & Fixed Income

NT-Bills Update: Mild Buying Interests as Average Yield Contracted 1bp WoW to 7.65%

Sep 12, 2022   •   by Afrinvest Research   •   Source: Afrinvest   •   eye-icon 253 views

Last week at the Nigerian Treasury Bills (“NT-Bills”) secondary market, bullish run persisted. Albeit marginally as average yield dipped by 1bp W-o-W to settle at 7.65% from 7.66% the previous week.


Mild buying interest was witnessed across all tenors. In more detail, yields across the short, medium and long-term instruments contracted 1bp, 2bps and 1bp respectively. The 24-Nov-22 bill enjoyed the most demand with a-3bps dip in yield.


At the PMA, the Apex bank offered a total of N214.74bn across the 91-, 182- and 364-Day bills. Just like the previous auction, a weak demand level was recorded as bid-cover ratio remained unchanged at 1.1x. Furthermore, stop rates on the 91-, 182- and 364-Day maturities expanded 150bps, 85bps and 150bps respectively.
 
Please see detailed summary of the NT-Bills PMA below:

 
Going into the week, we expect to see increased activity level given the increasing stop rates. Moreso, investors would like to cover their unfilled positions at the PMA. However, the weak system liquidity (which stood at N101,677.80 short as of Friday) might slow things down. Thus, we advise investors to take advantage of maturities with relatively attractive yields across the curve.


Please see indicative secondary market NT-Bills rates below:


*Rates are valid till 01:45pm today (12-Sept-22)

*Please note that the minimum subscription for NT-Bills is N100, 000.00


FGN Bonds Update: Bearish Run as Average Yield Increased 18bps W-o-W to 12.97%

The domestic bonds secondary market witnessed a bearish run last week on the back of weak system liquidity (which stood at N54,598.25 as of Wednesday). Consequently, average FGN Bond yields expanded 18bps W-o-W to settle at 12.97% from 12.79% the previous week.

 

A further breakdown shows that average yields on the short and long dated instruments (12.25% and 13.69%) witnessed the most sell off (-50bps W-o-W) and (-8bps W-o-W) as yields on APR-2023FEB-2028 and MAR-2035 expanded -293bps, -19bps and -52bps W-o-W respectively.
 
Going into the week, we expect sustained bearish sentiments in the market on the back of weak system liquidity and selloffs witnessed last week. We therefore advise investors to trade cautiously while taking advantage of maturities with relatively attractive yields across the curve.
 
Please see below FGN Bonds secondary market rates


Rates are valid till 01:45 pm today [12-Sept-22]
*Please note that the minimum subscription for FGN Bonds is 20,000,000.00

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