Due to erratic secondary market activity, the average yield on Nigerian Treasury notes cleared lower, at around 22%. OMO bill yields increased as a result of selloffs and the CBN’s pause on rate changes.
Traders reported massive sell-offs of the 17-day to maturity bill at the start of the week in the secondary market. As a result, the average yield for all instruments increased to 21.7%, up 42 basis points.
According to an update from Cordros Capital Limited, the average yield on T-bills increased by 19bps to 22.5% across all market categories.
Fixed income securities experts stated in a separate market update that following the apex bank primary market auction, the yield on OMO Bills rose by 128 basis points to 20% in the secondary market. This occurred after a lackluster OMO auction.
At the Treasury bill primary auction conducted last week, the CBN offered instruments worth N179.36 billion. The offer was split into N39.90 billion for the 91-day, N5.44 billion for the 182-day, and N134.02 billion for the 364-day bills.
Fixed interest securities traders said the auction was massively contested as the total subscription settled at N914.05 billion – recording bid-to-offer ratio of 5.1x.
Eventually, the CBN allotted bills worth N274.67 billion. The allotment was split into N16.59 billion for the 91 day bills, N5.44 billion for the 182 day bills and N252.64 billion for the 364 days bills.
Spot rates were retained amidst worsening inflation conditions and higher interest rate environment. Auction details showed that stop rate on 91-day bills cleared at 16.24%, the same paid on previous auction.
Also, 182-day bills was sold at 17.00% while the apex bank offer the same rate as previous on 364 day priced at 20.70%. At the OMO auction, the CBN offered participants instruments worth N500.00 billion. The total subscription at the auction settled at N286.65 billion, translating to a bid-to-offer ratio of 0.6x.
CBN allotted N260.65 billion to successful bidders, split into N20.50 billion for the 99-day, N1.00 billion for the 183-day and N239.15 billion for the 365-day.
The apex bank also made moderate adjustment to spot rates pricing on the OMO bill. Short tenor OMO bills was priced at 18.99%, marginally lower from 19.00% previously offered on the same bills.
At the belly, the CBN priced 181-day bills at 19.48%, 2 basis points below 19.50% previous sold. Spot rates on 363 days OMO bills was sold at 21.50%, up from 21.13% at the previous auction.
