Last week, bearish momentum was sustained in the Nigerian Treasury Bills (“NT-Bills”) secondary market, primarily influenced by sell-offs at the long end of the curve despite robust system liquidity, which stood at ₦121.51 billion (as of Friday, 28-Jun-2024). Consequently, average yield advanced 10 bps w-o-w to settle at 22.07% from 21.97% recorded in the previous week.
In more detail, sell-offs were witnessed in the 6-Feb-25, 13-Mar-25, and 8-May-25 as their yields increased by 80 bps, 73 pbs, and 74 pbs, sequentially, which plunged the market into a negative close. Conversely, buy interest was seen at the short and mid-end, as the average yield dipped by 7 bps and 9 bps, respectively.
At the PMA held on Wednesday, (26-Jun-2024) the Apex Bank offered a total of N228.72bn across the 91-, 182-, and 364-day instruments. The offer maintained a significant level of demand as it recorded a total bid-to-cover ratio of 2.23x (₦228.72bn offer vs. ₦773.80bn subscription). Consequently, the stop rates on the 91-day and 182-day instruments closed flat, while the 364-day instruments rose by 18 bps.
This week, we expect bullish sentiment to return to the secondary market on the back of robust system liquidity. We advise investors to trade cautiously and take advantage of relatively attractive bills across the curve along with offers from corporates.
Afrinvest
