Yield on Treasury Asset Steadies After CBN Auction

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The average yield on Naira denominated Treasury bills asset steadies on Wednesday as the Central Bank of Nigeria (CBN) conducted a primary market auction (PMA) to roll over maturing bills today.

Though the low-interest rate environment and disinflation have continued to drag yield movement lower, analysts predicted a robust subscription level as sizeable funds are available for investing play in the fixed income market.

However, the detail of the apex bank Treasury bills auction results for today is yet to be made available as of press time.

In the money market, there was a calm as short term rates were steady. Data from the FMDQ Exchange platform shows that the average interbank rate sustained its position from the prior session.

Analysts at Alpha Morgan Capital attributed this to flattened Open Buy Back rate and Overnight rate respectively, closing at 15.75% and 16.25% midweek.

Separate analysts’ notes show that the Nigerian Treasury bills secondary market closed on a flat note with average yield across the curve closing flat at 4.51 per cent. Average yield across the long-term maturities expanded by 1 basis point, according to market data.

However, the average yields across short-term and medium-term maturities remained unchanged at 3.52 per cent and 3.74 per cent, respectively, according to FSDH Capital note.

Analysts at the firm hinted that NTB 27-Oct-22 (+12 bps) maturity bill witnessed mild selling pressure, while yields on 21 days to maturity bills remained unchanged.

At the Primary Market Auction held today, the Central Bank offered Treasury Bills worth ₦15.03 billion across 91-day (₦4.94 billion) and 182-day (₦10.09 billion) tenors.

In the OMO bills market, the average yield across the curve increased by 6 basis points to close at 5.51 per cent as against the last close of 5.45 per cent, FSDH Capital spotted.  

Average yield across the short-term maturities expanded by 8 basis points. It was noted that the average yields across medium-term and long-term maturities remained unchanged at 5.30 per cent and 6.07 per cent, respectively.

OMO 1-Feb-22 (+51 bps) and OMO 8-Feb-22 (+40 bps) maturity bills witnessed selling pressure, while yields on 12 days to maturity bills remained unchanged; FSDH note shows.

FGN bonds secondary market closed on a mild as the average bond yield across the curve cleared lower by 1 basis point to close at 8.04 per cent from 8.05 per cent on the previous day.

Analysts notes indicate that average yields across short tenor and long tenor of the curve decreased by 1 basis point and 4 basis points, respectively. However, the average yield across the medium tenor of the curve increased by 11 basis points in the midweek trading session.

The 24-JUL-2045 maturity bond was the best performer with a decrease in the yield of 16 bps, FSDH stated while analysts said the 23-FEB-2028 maturity bond was the worst performer with an increase in yield of 17 basis points.

The Debt Management Office (DMO) released its FGN Bonds offer circular for December 2021 Primary Market Auction, indicating plans to offer Federal Govt. bonds worth ₦100 billion through re-opening of 10-year (₦50 billion) and 20-year (₦50 billion) tenors.