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NIBOR Trends Upward Amid Financial System Liquidity Strain…

In the just concluded week, CBN auctioned T-bills worth N48.57 billion in the Primary Market.

Amid an oversubscription of 638.19%, given the sustained demand pressure from the foreign portfolio investors, we saw stop rates fall further for all tenor days: 91-day, 182-day and 364-day maturities to 10.30% (from 10.75%), 12.20% (from 12.50%) and 12.36% (from 12.86%) respectively in line with our expectation.

The apex bank also sold N526.01 billion worth of T-bills in the secondary market; hence, the total outflows worth N574.58 billion offset the inflows from the matured bills worth N169.44 billion.

Following strain in financial system liquidity, NIBOR for overnight funds, 1 month and 3 months tenure buckets rose to 15.13% (from 12.36%), 10.47% (from 9.85%), 13.22% (from 12.67%) respectively. However 6 months rate fell to 14.75% (from 14.77%).

Elsewhere, NITTY increased for most maturities tracked as investors cashed in profits – yields on 1 month, 3 months and 12 months maturities fell to 10.02% (from 9.14%), 12.09% (from 11.77%) and 14.65% (from 14.48%) respectively; however, 6 months yield fell to 13.79% (from 13.95%).

In the new week, T-bills worth N54.00 billion will mature via the secondary market. However, with the Debt Management Office (DMO) expected to issue N100 billion worth of debts, we expect NIBOR to trend upwards.

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