Focus will be shifted to the NTB PMA as the Central Bank of Nigeria (CBN) is set to roll over N161.87 billion worth of treasury bills on Wednesday.
This is coming after the Treasury bills secondary market closed on a bullish note this week, as the average yield across all instruments dipped by 37 basis points (bps) to 3.6 per cent.
Analysts at Cordros Research attributed the performance to participants’ looking to compensate for unmet demand at the NTB PMA, amid quiet activity in the Open Market Operations (OMO) segment of the market. Across the segments, the average yield contracted by 39bps to 3.6 per cent in the NTB segment, but remained flat at 3.0 per cent in the OMO secondary market.
At the NTB primary auction, the CBN offered to participants instruments worth N224.50 billion – N1.03 billion of the 91-day, N10.55 billion of the 182-day, and N212.92 billion of the 364-day bills.
The auction was keenly contested with a total subscription of N906.21 trillion (bid-to-offer: 4.0x) with more demand skewed towards the longer-dated bill (N890.55 billion translating to 98.3 per cent of the total subscription).
Eventually, the CBN allotted bills worth N324.50 billion – N1.03 billion of the 91-day, N10.55 billion of the 182-day, and N312.92 billion of the 364-day – at respective stop rates of 1.44 per cent (previously: 3.00 per cent), 6.00 per cent (previously: 3.24 per cent), and 10.00 per cent (previously: 9.90 per cent).
Reacting to the performance of the T-bills market, Cordros Research said, “In the coming week, we anticipate an upward tilt in T-bills yield, following our expectation of a lower system liquidity. Nonetheless, we expect market focus to be shifted to the NTB PMA holding on Wednesday (15 March), where the CBN is scheduled to roll over NGN161.87 billion worth of bills”. For their part, analysts at Afrinvest said, “This week, we expect a slightly negative performance in the secondary market due to tight liquidity conditions (despite T-bills maturities worth N20.2 billion).
SOURCE: THE SUN
