T-Bills Yields Jump 0.11% on Sell Pressure

By Dipo Olowookere

The secondary market for treasury bills finished bearish yesterday, with yields across maturities tracked during the trading session facing north.

Business Post observed that activities at the market on Monday were characterised by sell-off across the tenors, which pushed the average yields higher by 0.11 percent to 12.12 percent.

An analysis of the yesterday’s trading session showed that at the close of business, the one-month bill recorded a 0.02 percent rise in its yields to settle at 10.97 percent.

Yields on the three-month instrument went up by 0.30 percent to close at 11.31 percent, while yields on the six-month tenor rose by 0.03 percent to 12.31 percent, with yields on the 12-month maturity going up by 0.07 percent to 13.88 percent.

At the market yesterday, the Central Bank of Nigeria (CBN) still paused the issuance of OMO bills to market players despite buoyant system liquidity.

However, there are strong indications that the central bank will conduct an OMO auction this week so as to soak more liquidity hitting the financial market in form of OMO maturity and FAAC disbursement.

Meanwhile, the average money market rates increased on Monday by 3.64 percent to settle at 9.15 percent on the back of funding pressures for the weekly forex wholesale auction as well as forex swaps by the CBN.

At the close of transactions, the Open Buy Back (OBB) rate increased by 3.57 percent to 8.86 percent from 5.29 percent, while the Overnight (OVN) rate jumped by 3.71 percent to 9.43 percent from 5.71 percent.

According to Cowry Asset, “With the reduction in system liquidity, we expect the rates to remain at elevated for most of the week, with some respite from OMO maturities of N89 billion expected later in the week.”