One-Year T-Bills Yield Rises to 14.3%

By Dipo Olowookere

There was a slight rise in the yields on the 6-month and 12-month treasury bills on Monday as investors prepare for the sale of the debt instruments via the primary market by the Central Bank of Nigeria (CBN) later this week.

Yield on 6-month bill slightly rose by 0.05 percent to settle at 13.47 percent, while the one-year tenor marginally increased by 0.07 percent to close at 14.27 percent.

However, for the one-month maturity, the yield depreciated by 0.13 percent to close at 10.96 percent, while the yield on the 3-month tenor went down by 0.05 percent to finish at 11.11 percent.

During the trading day, the market generally was bullish as the average yields of T-bills depreciated by 0.12 percent to settle at 12.45 percent.

It was observed that the central bank did not conduct the sale of treasury bills via the Open Market Operations (OMO) yesterday.

According to analysts at Zedcrest Research, “We expect client demand for T-bills to be sustained this week, as investors will also look to re-invest funds from CP and OMO maturities of N40 billion and N62.80 billion respectively.”

Meanwhile, the average money market rates expanded on Monday by 1.36 percent to settle at 18.22 percent.

This came on the back of the 1.43 percent rise recorded by the Open Buy Back (OBB) rate and the 1.28 percent growth posted by the Overnight (OVN) rate.

At the close of business yesterday, the OBB rate closed at 17.86 percent against 16.43 percent of the previous session, while the OVN rate ended at 18.57 percent versus 17.29 percent last Friday.

The money market rates have been predicted to remain in double digits for the earlier section of the week though FAAC disbursements of N350 billion and OMO maturity of N62.80 billion are anticipated to have an impact on the rates and could moderate them later in the week.