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T-Bills Market Bearish as Yields Rise 0.21%

By Dipo Olowookere

The treasury bills market was bearish on Friday as bears took over the market, with tight system liquidity weighing on the secondary market yields.

According to analysts at Zedcrest Research, at the close of transactions today, the yields expanded by 0.21 percent on the average across quoted benchmark T-bills securities.

This was a sell-off continued on the short- to mid-end of the curve. However, the long-end of the curve traded flat as yields stood at 17.64 percent for the longest traded T-bills maturity.

“We expect the T-bills market to remain bearish in the coming week in light of dwindling market liquidity and dampened investor appetite for T-bills,” Zedcrest Research said.

Next week, the Central Bank of Nigeria (CBN) is expected to continue the issuance of OMO T-bills in line with their recent hawkish stance which supports yields trending northwards.

Meanwhile, at the money market today, Open Buy-Back (OBB) and Overnight (OVN) rates rose sharply to a one month high of 24.33 percent from 7.79 percent and 26.08 percent from 8.71 percent respectively.

This was as system liquidity squeezed further as expected as market participants funded for FX Retail interventions by the CBN.

“We expect funding rates to remain elevated in the coming week as the CBN is likely to continue its aggressive liquidity mop up activities in anticipation of a combined NTB & OMO maturities of N551 billion,” the Lagos-based investment firm said.

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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