Last week the Nigerian Treasury bills market exhibited strong bullish activity, driven largely by the impact of unsuccessful bids from the Primary Market Auction (“PMA”) held on (Wednesday 21-Aug-24) which exerted downward pressure on yields. As a result, average yield dipped by 262bps w-o-w to settle at 22.32% from 24.94% recorded the previous week.
Demand was witnessed at all ends of the curve as the average yields of the short, mid and long ends fell 341bps, 254bps and 172bps w-o-w sequentially. This was evident in the 9-Jan-25 and 12-Dec-24 maturities which contracted by 574bps and 439bps w-o-w respectively.
At the PMA held on Wednesday 21-Aug-24, the Apex bank offered a total of ₦409.97bn across the 91-, 182- and 364-Day instruments. Stop rates on the 91-, 182- and 364-Day maturities dipped 30bps, 30bps and 99bps respectively.
The average stop rates declined 53bps to 19.43% from 19.96% at the last auction. This week, given the tight system liquidity (which stood at ₦466.89bn as of Friday 23-Aug-24), we expect the emergence of the bears.
We, therefore, advise investors to trade cautiously and take advantage of attractive bills across the curve, while they stay informed about offers from corporates.
