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T-Bills Yields to Slightly Fall at Secondary Market

By Dipo Olowookere

The average yield of treasury bills at the secondary market is expected to decline today as a result of expectations for an Open Market Operations (OMO) auction by the Central Bank of Nigeria (CBN), analysts at Zedcrest Research have said.

Yesterday, the T-bills market was relatively flat for most of the day, with yields just compressing marginally by 0.03 percent.

This was as market players awaited results from the primary market auction (PMA) conducted yesterday by the apex bank.

Some late rallies were seen yesterday on the 19-Sep maturity following rumour of a significantly strong demand at the auction.

During Wednesday’s PMA, the demand was significantly robust, as all tenors with the exception of the 91-day were well oversubscribed by investors.

Rates consequently trended downwards by 0.18 percent on the average from their previous auction level, with rates clearing at 10.90 percent, 12.10 percent and 13.33 percent on the 91, 182 and 364-day bills respectively.

At the money market, the average rate recorded a marginal decline, settling at 4.63 percent at the close of business.

While the Open Buy Back (OBB) rate went down to 4.25 percent from 4.83 percent, the Overnight (OVN) rate crashed to 5 percent from 5.58 percent.

However, the rates are expected to remain stable today with inflows from OMO maturities of about N268 billion expected to provide a cushion for any outflows from the expected OMO sale by the CBN.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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