Renewed Profit Taking Pushes T-Bills Yields to 12.70%

By Dipo Olowookere

Average yields of treasury bills at the secondary market were up on Monday as renewed profit taking by investors dominated the trading session.

Business Post reports that the yields increased across the four benchmark T-bills monitored during the trading session. At the close of day, the average yield rose by 0.65 percent to 12.70 percent.

An analysis showed that yield on the one-month instrument increased by 0.43 percent to 11.80 percent from 11.37 percent, yield on the three-month bill jumped by 0.11 percent to 11.79 percent from 11.68 percent, yield on the six-month tenor increased by 0.13 percent to 12.26 percent from 12.13 percent, while yield on the 12-month maturity rose by 0.62 percent to 14.94 percent from 14.32 percent.

Since the Central Bank of Nigeria (CBN) released a directive some days ago, investors have continued to ponder on it.

Also, with the new apex bank’s directive, OMO bills worth N351.67 billion should mature today (Tuesday). In order to address the confusion of its recent circular, the CBN said OMO bills, which used to mature on Thursdays, will no longer be done on Tuesdays, while T-bills would retain its maturity on Thursdays.

Meanwhile, liquidity in the money market remained robust on Monday despite the funding provision for the CBN Wholesale forex auction by authorised dealers.

As a result of this, the Open Buy-Back (OBB) rate slightly increased by 0.14 percent, while the Overnight (OVN) rate depreciated by 0.21 percent. At the close of business, the OBB rate rose to 3.14 percent from 3.00 percent, while the OVN rate dropped to 3.86 percent from 4.07 percent.