The Nigerian Treasury Bills (NTB) secondary market experienced bullish sentiment last week, as heightened system liquidity and investor positioning shaped trading activity.
As a result, the average benchmark yield declined by 22bps w-o-w to close at 25.01%.
In detail, bullish sentiment dominated all the maturities, with the short -, mid- and long end shedding 11bps, 12bps and 37bps w-o-w respectively. Post-auction trading saw demand pick up for the new 1-year paper, as it traded as low as 20.85%, marking a 9bps decline from the stop rate.
At the NTB auction held on 22-Jan-25, the DMO (Debt Management Office) offered ₦50.00bn, ₦80.00bn, and ₦400.00bn across the 91-day, 182-day, and 364-day tenors, respectively.
Demand was particularly strong on the 364-day tenor, reflected in a subscription ratio of 6.23x, while the 91-day and 182-day tenors recorded moderate interest with subscription ratios of 0.53x and 0.22x, respectively.
Consequently, the stop rates for the 91-day, 182-day, and 364-day papers settled at 18.00%, 18.50%, and 21.80%, compared to their previous levels of 18.00%, 18.50%, and 22.62%.
This week, we expect market direction to remain guided by liquidity levels and investor appetite for high-yielding instruments in the secondary market.
Thus, we (Afrinvest analysts) advice investors to position in relatively attractive bills across the yield curve, while also remaining alert for possible corporate offerings.
