T-Bills Market Bullish as Yields Drop to 13.73%

October 23, 2018
t-bills market

By Dipo Olowookere

Activities resumed yesterday at the secondary market for treasury bills with investors cherry-picking on attractive rates on the short end of the curve (Nov – Jan).

Also, market players maintained a risk off stance to maturities on the longer end in anticipation of a further OMO auction by the Central Bank of Nigeria (CBN) later this week.

Generally, Business Post reports that the market was dominated by bullish sentiment with the average yields depreciating at the close of business on Monday by 0.27 percent to close at 13.73 percent.

Specifically, the yields on the 1-month went down by 0.64 percent, 3-month by 0.11 percent, 6-month by 0.02 percent, 9-month by 0.45 percent and the 12-month bill by 0.14 percent.

But the market is expected to be slightly bearish in the build up to the OMO auction this week as system liquidity is anticipated to tighten further following a wholesale SMIS by the apex bank yesterday.

Meanwhile, the average money market rate appreciated on Monday by 8.15 percent to settle at 21.15 percent.

The rise was as market players reacted to funding pressures from the N75 billion wholesale SMIS by the central bank.

Specifically, the Open Buy Back (OBB) rate grew by 9.26 percent to close at 20.00 percent from 12.67 percent, while the Overnight (OVN) rate advanced by 6.67 percent to finish at 22.29 percent from 13.33 percent.

The are strong indications that the rates will remain high today in the absence of any significant inflows into the market.

Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

Mr Olowookere can be reached via [email protected]

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