WeekAheadTBs: CBN to retire T-bills as interbank rates dips

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In the just concluded week, CBN auctioned Treasury Bills worth N109.71 billion via the Primary market.

In line with our expectation, stop rates for 90-day and 182-day bills moderated to 10.00% (from 10.15%) and 12.49% (from 12.50%) respectively amid investors’ high preference for short term fixed income securities. However, stop rate for 364-day bills increased marginally to 12.77% (from 12.74%).

Hence, the total outflows worth N109.71 billion partly offset the total matured bills worth N172.51.

Amid financial system liquidity ease, NIBOR moderated for all tenure buckets: NIBOR for overnight funds rate, 1 month, 3 months and 6 months tenure buckets moderated to 5.25% (from 16.81%), 11.84% (from 11.97%), 11.88% (from 12.22%) and 14.31% (from 14.43%) respectively.

Meanwhile, NITTY fell for most maturities tracked amid renewed bullish activity – yields on 1 month, 3 months and 6 months declined to 10.84% (from 11.09%), 10.73% (from 11.16%) and 13.27% (from 13.42%) respectively; however, 12 months maturities rose to 14.49% (from 14.20%).

In the new week, CBN will retire T-bills worth N196.41 billion, hence, we expect interbank interest rates to fall on anticipated ease in financial system liquidity.

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