T-Bills Market to Stay Bearish as Investors Anticipate N277b Inflows

By Dipo Olowookere

The treasury bills market is expected to maintain a slightly bearish posture on Thursday (today), analysts at Zedcrest Research have projected.

This is as market players anticipate a significant drawdown in system liquidity via a retail FX auction on Friday.

In addition, market players would be anticipating the conduct an Open Market Operations (OMO) auction today by the Central Bank of Nigeria (CBN) to soak up inflows of N277 billion from maturing bills.

Yesterday, the T-bills market was relatively quiet, with slight bullish sentiments observed on the short end of the curve (Oct – Jan), but with some more profit taking witnessed on the longer end of the curve (Sept/Oct) in anticipation of today’s OMO auction.

Meanwhile, a look at the money market showed that the average rates slightly appreciated by 0.33 percent to close at 9.92 percent.

This followed the 0.50 percent and 0.17 percent rise in the Open Buy Back (OBB) and Overnight (OVN) rates respectively.

While the OBB rate increased to 9.67 percent from 9.17 percent, the OVN rate skyrocketed to 10.17 percent from 10.00 percent.

This occurred as system liquidity remained buoyant at N190 billion positive with the slight decline in system liquidity from N240 billion in the previous session coming on the back of outflows for the wholesale FX auction, which had already been provided for on Monday.

“We expect rates to remain stable, barring a significant OMO sale today,” analysts at Zedcrest Research stated.