NT-Bills Market Sustains Tepid Performance as Average Yield Dips Marginally by -1bp WoW to 0.39%

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Tuesday, December 29, 2020 / 12:35 PM / By Afrinvest Research/ Header Image Credit: ZaranTech 


Last week, the Nigerian Treasury Bills ("NT-Bills") secondary market witnessed a slight improvement in activity levels during the four-day trading week as average yields across all tenors contracted marginally by 1bp W-o-W to 0.39% from 0.40% the previous week. Particularly, the 9-Sep-21 and 16-Sep-21 instruments enjoyed the most buying interests, declining 14bps and 15bps W-o-W respectively.

 

In more detail, average yield on the short- and long-dated maturities recorded some buying activities as their average yields dipped 3bps and 5bps W-o-W to settle at 0.33% and 0.48% respectively. Conversely, the medium-term maturities witnessed sell-offs as its average yield expanded 6bps W-o-W to 0.29% from 0.23% the previous week.

 

This week, the Apex bank is scheduled to roll-over maturing bills worth N74.8bn at the Primary Market Auction ("PMA") across the 91 (N10.0bn), 182 (N20.0bn) and 364-day (N44.8bn) tenors.

 

Please see below our PMA expectations

TENOR

91- DAY

182 - DAY

364 - DAY 

Offer Amount

10,000,000,000

20,000,000,000

44,837,720,000

Last Stop Rate

0.048%

0.500%

0.139%

Expected Stop Rate Range (%)

0.045% - 0.060%

0.500% - 0.700%

0.14% - 0.18%

 

In addition, we expect the N481.3bn worth of maturing OMO bills scheduled to hit the system this week to further bolster liquidity levels (N545.9bn in the positive as at Thursday). Thus, we anticipate a sustenance of the mild bullish sentiments in the NT-Bills secondary market as investors may seek to fill possibly unmet bids following PMA and therefore maintain our advice that investors look out for relatively higher yielding alternatives including corporate offers.

 

Please see indicative secondary market NT-Bills rates below:

Maturity

Tenor (Days)

Rate (%) p.a.

Yield (%) p.a.

11-Mar-21

72

1.00

1.00

13-May-21

135

1.55

1.56

15-Jul-21

198

2.10

2.12

26-Aug-21

240

2.35

2.39

28-Oct-21

303

2.66

2.72


Rates are valid till 01:45pm today (29-Dec-2020)

 

 

FGN Bonds Update: Bearish Streak Continues as Average Yield Advances 56bps W-o-W to 5.9%


Last week, the FGN Bond secondary market sustained its bearish streak as domestic players continued to exit positions ahead of the close of the year. Consequent on this, average yields across the curve advanced 56bps W-o-W to 5.9% from 5.4% the previous week.

 

Particularly, the 23-MAR-25, 14-MAR-24 and 23-FEB-28 instruments witnessed the most sell-offs, expanding 159bps, 135bps and 128bps W-o-W respectively.

 

Please see indicative secondary market bond rates below:

Bond

Tenor (Years)

Yield (%)

Coupon (%)

Implied Price (N)

Jan-22

2

1.10

16.39

116.30

Apr-23

3

2.05

12.75

124.19

Mar-24

4

2.55

14.20

135.67

Mar-25

5

2.80

13.53

142.55

Jan-26

6

4.65

12.50

135.04

Mar-27

7

4.70

16.29

161.83

Feb-28

8

4.90

13.98

154.19

Jul-34

14

6.80

12.15

146.87

Mar-36

16

6.85

12.40

151.93

Apr-37

17

6.90

16.25

190.63

Apr-49

29

7.10

14.80

193.39


Rates are valid till 01:45pm today (29-Dec-2020)


*Please note that the minimum subscription for Bonds is N20,000,000.00

 

Going into the week, we expect that the FGN bonds secondary market will sustain its bearish posture as local investors continue to sell-off positions as the year comes to a close. Thus, we advise investors to take advantage of the relatively improved yields along the curve.


Proshare Nigeria Pvt. Ltd.


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 Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

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