T-Bills Market Bullish on Absence of OMO Sale

By Dipo Olowookere

The absence of an Open Market Operations (OMO) on Wednesday caused a demand across the entire yield curve of treasury bills.

Also, the T-bills market traded on a bullish note as a result of ample liquidity in the money market during the trading day.

According to Zedcrest Research, demand was more skewed to the longer end of the curve as investor cherry picked maturities with decent yields.

The Central Bank of Nigeria (CBN) is anticipated to float an OMO auction on Thursday to counter inflows from the expected monthly statutory disbursements and OMO T-bills maturity of N46 billion.

“We expect market activity to oscillate in tandem with the level of liquidity in the money market in the near term,” the investment firm said.

At the money market yesterday, the average rates depreciated in the absence of any funding pressures by market participants.

The Open Buy Back (OBB) and Overnight (OVN) rates declined significantly to 11.86 percent and 12.86 percent respectively, with system liquidity estimated to have closed the day at N194 billion positive.

However, the rates are expected to trend northwards closing the week as the CBN is anticipated to mop up excess cash via OMO auction, Retail FX and Monthly FGN Bond auction sales.