T-Bills Yield Slightly Rises by 0.01% as CBN Mops up N296b

By Modupe Gbadeyanka

The treasury bills market traded mixed on Thursday as market players offloaded some holdings of short tenured bills.

The sell off was as a result of the OMO auction floated by the Central Bank of Nigeria (CBN) during the trading day and the more attractive 364-day tenor on offer.

Consequently, the average T-bills yield appreciated marginally by 0.01 percent to 15.62 percent.

It was observed that the yields on the 1 month and 6 months instruments rose by 0.18 percent, and 0.25 percent respectively while the 3-month, 9-month and 12-month tenors recorded respective yield declines of 0.34 percent, 0.01 percent and 0.02 percent.

During the OMO sale yesterday, investors bided for a total of N295.8 billion of the N500 billion offered, with most bids skewed to the 364-day (N258 billion), and rates maintained at 11.90 percent, 13.50 percent and 15.00 percent on the 91, 182 and 364-day bills respectively.

“We expect the CBN to maintain its pace of OMO interventions, whilst also noting the possibility for higher stop rates or direct mop ups (stab) due to continued under subscriptions by market players,” Zedcrest Research said in its report.

Meanwhile, rates in the money market moderated significantly by 40 percent to 16.50 percent and 17.25 percent, as system liquidity (which was hitherto in a net negative position of N144 billion) was significantly bolstered by inflows from OMO and PMA repayments (550 billion).

“With total OMO sale of N295 billion, we estimate system liquidity to be at N110 billion positive as at COB.

“Rates are expected to close the week slightly higher, with CBN expected to conduct a further OMO auction on Friday,” Zedcrest Research added.