T-Bills Market Quiet as PMA Rates Slightly Decline

By Modupe Gbadeyanka

The T-bills market opened the month on a relatively quiet note, as market players shifted focus to the T-bills Primary Market Auction, analysts at Zedcrest Research said.

At the market on Wednesday, bids at the auction were relatively more aggressive, with significant demand from market players especially on the 1-year bill which was oversubscribed by 175 percent.

During the exercise, the Central Bank of Nigeria (CBN) rolled over the total amount of maturing T-bills at slightly lower rates; -0.10 percent and -0.19 percent on the 182-day and 364-day bills, while the 91-day bill remained unchanged from previous levels.

The stop rates for the 91-day, 182-day and 364-day bills cleared at 10 percent, 10.40 percent and 11.30 percent respectively.

The T-bills market is expected to trade on a relatively quiet note on Thursday as the CBN is expected to float an OMO auction to counter inflows from around N324 billion maturing OMO bills.

“We however expect slight bullish sentiments on the longer tenured bills from market players looking to cover some of their lost auction bids,” Zedcrest Research said.

At the money market, the buoyant system liquidity via FAAC inflows of about N360 billion pushed interest rates down as the Open Buy-Back (OBB) and Overnight (O/N) rates closed at 2.92 percent and 3.75 percent respectively.

System liquidity which rose significantly higher to about N496 billion at the open of the day is estimated to remain relatively unchanged as there were no significant outflows from the system.

“We expect rates to remain relatively stable tomorrow as the CBN is expected to float an OMO auction to manage the excess inflows from expected OMO T-bill maturities,” the investment firm disclosed in its report.