The Nigerian Treasury Bills (“NT-Bills”) secondary market closed the week on a positive note, as investors continued to demand for higher yield, supported by improved system liquidity, (which stood at N752.8bn long as of Tuesday, 28-May-24).
Consequently, average yield dipped by 25bps, to print at 21.72%, down from the previous week’s 21.97%.
Buying interests were witnessed majorly at the short end of the curve as average yield contracted by 131bps. Specifically, the 11-Jul-24 bill (down 501bps) enjoyed the most buy interest.
On the other hand, the mid, and long ends of the curve witnessed mild selloffs as their average yields rose 11bps and 2bps w-o-w, evidence in the 24-Oct-24 (up 142bps) and 20-Feb-25 (up 80bps) bills respectively.
On, Wednesday, 05-Jun-24, the Apex bank is scheduled to offer bills worth ₦221.13bn across the 91-, 182- and 364-Day instruments in the Primary Market Auction (“PMA”).
This week, we expect the market to open on a quiet note as investors position ahead of the PMA auction on Wednesday while we believe the result of the auction will set the tone of the market for the rest of the week. Thus, we advise investors to look out for relatively attractive bills across the curve, as well as possible commercial paper offerings.
FGN Bond
The FGN secondary bond market continued its negative trajectory, as average yield rose by 2bps w-o-w to 18.69% from 18.67% in the past week.
In more details, selloffs were witnessed across all the curve, as average yield at the short, and long ends of the curve both increased by 1bps, while average yield at the mid end of the curve expanded 4bps w-o-w.
The MAR-2025, FEB-2034 and APR-2049 instruments witnessed the most selling interest across respective tenors as their yields rose 12bps, 27bps and 3bps w-o-w respectively.
This week, the bearish sentiment is expected to persist, barring any positive news that could potentially drive a positive performance in the market. Hence, we advise investors to take advantage of maturities with relatively attractive offers in the secondary market particularly at the short end of the curve.
Afrinvest
