T-Bills Yields Slightly Rise by 0.05% as OMO Records Low Sales

By Dipo Olowookere

The average treasury bills yields were marginally up on Wednesday as the market remained slightly bearish in yesterday’s session.

It was observed that the yields gained 0.05 percent with most selloffs seen on the short end of the curve, whereas there were slight interests on some mid and long tenors.

During trading yesterday, the Central Bank of Nigeria (CBN) floated another OMO sale, where about N53 billion was taken away from the banking system to curb inflation.

Business Post reports that the exercise, like in the past, was largely undersubscribed. The apex bank offered treasury bills worth N100 billion to investors, but it could only sell N53 billion with the rates still flat.

Of the N20 billion worth of the 100-day bill offered to market players, subscriptions worth N20 million were received and allotted at 11.90 percent. For the 205-day paper, the CBN offered N30 billion but got offers valued at N17.58 billion, which it allotted at 13.50 percent, while of the N50 billion worth of the 310-day note, subscriptions worth N22.53 billion were received and allotted at 15.00 percent.  

Today, market players will anticipate the maturity of treasury bills worth N492 billion in OMO and PMA and yields are further expected to remain high with some bargain hunting expected on the short end of the curve.

The long end of the curve should however become slightly pressured, with the CBN expected to intervene with a 364 day offering, Zedcrest Research said.

Meanwhile, rates in the money market remained relatively stable, with the OBB and OVN rates closing the day at 21.71 percent and 23.07 percent.

System liquidity which opened the day in negative territory was however estimated to have declined further to N86 billion negative due to the OMO sale by the CBN.

“We expect rates to moderate slightly tomorrow due to N492 billion inflows expected from OMO and PMA maturities. “The CBN is however expected to maintain its aggressive stance on systemic liquidity, with rates expected to significantly worsen toward weekend,” Zedcrest Research said.