NT-Bills Update: Bearish Sentiment Persists as Average Yield Expands 32bps WoW to 10.99%


The Nigerian Treasury Bills (“NT-Bills”) secondary market closed the previous week on a bearish note despite improved system liquidity (which stood at N268.0bn long as of Friday). Consequently, average yield increased by 32bps to close at 10.99% from 10.67% recorded in the past week.

Across the benchmark, average yield expanded at the short (+2bps) and mid- end (+33bps) of the curve, as sells-offs were witnessed across all maturities. However, average yield contracted at the long end (-6bps), as the 9-Nov-23 and 23-Nov-23 maturities were introduced to the market.

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On Wednesday, 7-Dec-22, the Apex bank is scheduled to roll over bills worth ₦54.36bn across the 91-, 182- and 364-Day instruments in the Primary Market Auction (PMA).

Please see below our PMA expectations:

Auction Date 7-Dec-22 7-Dec-22 7-Dec-22
Allotment Date 8-Dec-22 8-Dec-22 8-Dec-22
Tenor 91-Day 182-Day 364-Day
Offer Amount (₦’bn)  1,028,893  1,935,259  51,392,617
Last Stop Rate (%) 6.50 8.05 14.84
Expected Stop Rate Range (%) 6.55 – 7.00 7.50 – 8.55 13.50 – 15.50

Going into the week, we expect the market to resume on a quiet note, as investors remain on the side lines ahead of the PMA on Wednesday. Thus, we advise investors to continue to position in relatively attractive bills across the yield curve, while also staying alert for possible corporate offerings.

Please see indicative secondary market NT-Bills rates below

Maturity Tenor (Days) Net Rate (%) p.a. Yield (%) p.a.
26-Jan-23 52 6.65  6.71
9-Feb-23 66 7.15 7.24
9-Mar-23 94 7.55 7.70
13-Apr-23 129 8.90 9.19
11-May-23 157 8.80 9.15
10-Aug-23 248 9.50 10.16
23-Nov-23 353 11.50 12.94

Rates are valid till 01:45 pm today (05-Dec-22)
*Please note that the minimum subscription for NT-Bills is 100, 000.00

FGN Bond Update: Average Yield declined by 10bps W-o-W to 14.28%
The bearish sentiment in domestic bond secondary market halts, as the bulls dominated the market. Thus, average yield contracted by 10bps W-o-W to 14.28%from 14.38% in the past week.

A further breakdown shows that buy interest were witnessed at short and long end of the curve, as average yields dipped by 30bps and 3bps respectively. This is evident in the MAR-2027 and the MAR-2036 maturities as yields declined by 55bps and 26bps W-o-W respectively. On the other hand, average yield at the mid end of the curve closed flat at an average of 14.47% evident in the APR-2029 and MAY-2029 maturities as yield remained unchanged at 14.45% respectively.

This week, we expect to see continued buy interest, as investors continue to demand for maturities with attractive yield. We therefore advice investors to take advantage of maturities with relatively attractive offers in the secondary market particularly at the short and long end of the curve.

Please see below FGN bond secondary market rates:

Maturity Tenor (Years) Yield (%) Coupon (%) Implied Price (N)
Mar-24 1.2            13.60              14.20                    100.62
Mar-25 2.2            13.65              13.53                    99.72
Jan-26 3.1            13.68              12.50                      97.04
Mar-27 4.2            13.50              16.29                    108.79
Feb-28 5.2            13.75              13.98                    100.78
Jul-34 11.6            13.95              12.15                      89.75
Mar-36 13.2            14.10              12.40                      89.86
Apr-37 14.3            15.26              16.25                    106.01
Jan-42 19.1            14.00              13.00                    105.51

Rates are valid till 01:45pm today (05-Dec-22)
*Please note that the minimum subscription for FGN Bond is N20,000,000

Peter Okafor
Peter Okaforhttp://Naija247news.com
Peter Okafor Financial Journalist | Editor | Contributor Overview: Peter Okafor is a seasoned Financial Journalist, astute Editor, and valued Contributor at Naija247news Media Group. With an unwavering passion for dissecting complex financial landscapes, Peter has become a trusted name in delivering incisive and insightful coverage of economic events, market trends, and corporate dynamics. Professional Journey Peter's journey in financial journalism has been marked by a commitment to excellence. Joining the ranks of Naija247news, he has consistently demonstrated a keen understanding of the intricate interplay between finance and the global socio-economic fabric. Expertise: Specializing in financial markets, economic analyses, and business developments, Peter Okafor has honed his expertise over the years. His ability to unravel intricate financial narratives and present them in a comprehensible manner sets him apart in the world of financial journalism. Contributions As an Editor and Contributor, Peter has played a pivotal role in shaping the narrative of Naija247news. His contributions extend to thought-provoking articles, in-depth market analyses, and coverage of key events that impact the financial landscape. Educational Background: Peter holds a degree in Journalism, complemented by specialized courses in Finance and Business Reporting. His educational foundation has provided him with the tools to navigate the intricate world of financial journalism. Innovation and Adaptability: In an era of evolving media landscapes, Peter Okafor exemplifies innovation and adaptability. Leveraging digital platforms and emerging technologies, he ensures that financial insights reach a diverse audience, fostering financial literacy and awareness. Awards and Recognition: Peter's commitment to journalistic excellence has not gone unnoticed. He has been the recipient of several awards, recognizing his outstanding contributions to the field of financial journalism. Vision for the Future: Looking ahead, Peter Okafor envisions a future where financial journalism continues to empower individuals, shape economic policies, and drive positive change. His dedication to staying at the forefront of financial news underscores his commitment to this vision. Connect with Peter Okafor: - LinkedIn: [Peter Okafor](#) - Twitter: [@PeterOkafor_N247](#) In the dynamic realm of financial journalism, Peter Okafor stands as a stalwart, combining experience, expertise, and a forward-looking vision to illuminate the path of financial understanding for a global audience.

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