Investors Awaits N540bn Maturing Treasury Bills




Treasury Bills worth N539.95 billion are expected to mature via both the primary and secondary markets.

Owing to this, analysts have predicted relative ease in the financial system liquidity with resultant moderation in interbank rates.

Cowry Asset Management Limited stated this in its latest report.

The Central Bank of Nigeria (CBN), last week auctioned treasury bills worth N235.93 billion via open market operation (OMO).

The outflows were offset by N404.32 billion in matured treasury bills; coupled with the effect of funds from the Federation Account Allocation Committee that was disbursed last week.

As a result of this, the Nigerian Interbank Offered Rate (NIBOR) for overnight tenor bucket moderated to 7.72 per cent (from 16.75%) amid sustained financial liquidity ease, in line with expectation by the firm.

However, NIBOR for, one-month, three months and six months tenor buckets rose week-on-week to 12.71 per cent (from 12.63%), 13.7per cent (from 13.15%) and 15.49 per cent (from 14.41%) respectively.

On the other hand, the

Also, the Nigerian Inter-Bank Treasury bill True Yield (NITTY) fell for all maturities tracked amid renewed bullish activity as yields on the one month, three months, six months and 12 months maturities moderated to 10.68 per cent (from 10.75%), 11.15 per cent (from 10.99%), 12.58 per cent (from 12.15%) and 12.89 per cent (from 12.60%) respectively.

The report also revealed that last week, FGN bonds traded at the over-the-counter (OTC) segment depreciated in value for most maturities tracked on renewed sell pressure as investors sold their investments in the secondary market for higher stop rates in the primary market.

Specifically, the 20-year, 10% FGN JULY 2030 debt, the 7year, 16.00% FGN JUN 2019 debt and the 5year, 14.50% FGN JUL 2021 debt decreased by N0.29, N0.37 and N0.30 respectively; while their corresponding yields rose to 14.18% (from 14.12%), 12.83% (from 12.47%) and 13.69% (from 13.56%) respectively.

However, the 10-year, 16.39% FGN JAN 2022 debt increased in value by N0.55 and its corresponding yield fell to 13.55% (from 13.74%).

Meanwhile, the value of the FGN Eurobonds traded on the London Stock Exchange appreciated for all maturities tracked – the 10-year, 6.75% JAN 28, 2021 bond, the 10year, 6.38% JUL 12, 2023 note and the 15-year, 6.50% NOV 28, 2027 paper gained USD0.62, USD1.04 and USD1.87; their corresponding yields dropped to 4.85% (from 5.12%), 5.86% (from 6.10%) and 6.84% (from 7.13%) respectively.

“This week, we expect FGN bond prices to rise (with corresponding decrease in yields) at the OTC market amid expected ease in financial system liquidity,” the report added.

Furthermore, it showed that the naira depreciated week-on-week against the US dollar at the Investors & Exporters Forex Window (I&E FX) by 0.19 per cent to close at N362.28/$ amid a 0.30 per cent week-on-week decrease in external reserves to $47.27 billion as at last Thursday.

But the naira remained unchanged against the US dollar at the Bureau De Change segment and the parallel market to close at N357/$ and N360/$ respectively as CBN sustained its special intervention.

Also, the nation’s currency closed flat at the interbank foreign exchange market at N330/$ amid weekly injections by Central Bank of Nigeria (CBN) of $550 million into the foreign exchange market via the Secondary Market Intervention Sales (SMIS).

Meanwhile, all dated forward contracts at the interbank over-the-counter (OTC) segment depreciated – spot rate, one month, two months, three months and six months contracts lost 0.02 per cent, 0.19 per cent, 0.24 per cent, 0.32 per cent and 0.69 per cent, to close N305.90/$, N365.43/$, N368.81/$, N372.34/$ and N385.09/$ respectively.

“This week, we expect stability alternative forex market segments amid sustained CBN intervention therein,” the report added.

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