T-Bills Market to Trade Cautiously as CBN Conducts PMA Today

By Modupe Gbadeyanka

Analysts at Zedcrest Research have predicted that the treasury bills market will likely trade cautiously today as market participants keep an eye on the outcome of the sale of treasury bills by the Central Bank of Nigeria (CBN) via primary market auction (PMA).

During the exercise, the central bank will auction N9,54 billion worth of the 91-day bills, N69.57 billion worth of the 182-day bills and N136.52 billion worth of the 364-day bills.

“We expect rates to clear between 10.00 percent-10.20 percent, 10.30 percent – 10.50 percent and 11.40 percent-11.60 percent for the 91, 182 and 364 days papers respectively,” Zedcrest Research said.

Yesterday, it was observed that the T-bills market was scantily traded, with slight bearish sentiments witnessed on short-end of the curve due to end of month profit taking activities.

The medium and long end of the curve traded flat as market participants close their books for the month.

Meanwhile, interest rates closed the month on a calm note as the Open Buy-Back (OBB) and Overnight (O/N) rates remained steady at 8.58 percent and 9.58 percent respectively.

System Liquidity is estimated to close at around N511 billion positive due to the late credit of the monthly FAAC allocations into the system.

The rates are expected to trend southwards today on the back of the FAAC disbursements, however, the CBN may be poised to conduct an OMO auction to mop up excess liquidity from the system.