T-Bills Yields Drop 0.06% Amidst Monday’s Funding Pressures
By Dipo Olowookere
Liquidity squeeze for the foreign exchange wholesale auction debits on Monday caused the average treasury bills yields to face south, Business Post is reporting.
It was observed that yields of the debt instrument marginally went down by 0.06 percent at yesterday’s trading session to settle at 12.28 percent by the time market activities wrapped up.
For the four maturities tracked during the session, only the one-month tenor had its yield appreciating at the close of transactions. Yield on the 30-day bill went up by 0.07 percent to close at 10.98 percent from 10.90 percent of the previous day.
However, yield on the 3-month instrument fell by 0.17 percent to finish at 11.74 percent from 11.91 percent, yield on the 6-month tenor declined by 0.10 percent to end at 12.27 percent from 12.37 percent, while yield on the 12month maturity depreciated by 0.02 percent to settle at 14.11 percent from 14.13 percent.
According to analysts at Zedcrest Research, investors are gearing up for the sale of fresh treasury bills in the market by the Central Bank of Nigeria (CBN) via the primary market auction (PMA).
This was corroborated by Zedcrest Research, which said, “We expect the sell-off to cool in Tuesday’s session, as funding pressures reduce and market participants take positions ahead of the Primary Market Auction slated for later in the week.”
For the money market, the average rates jerked up by 4.47 percent yesterday to close at three-week highs of 16.40 percent at the end of the trading session. This occurred as market participants provided for FX wholesale auction debits.
Despite reaching intraday highs of 25 percent, the Open Buy Back (OBB) rate rose to 16.00 percent from 11.43 percent, while the Overnight (OVN) rate jumped to 16.79 percent from 12.43 percent.
“We expect rates to moderate in tomorrow’s session as funding pressures ease and market participants benchmark funding rates to the Standard Lending Facility (SLF) rate of 15.50,” Zedcrest Research said.