Average Yield on NT-Bills Sheds 2bps WoW to 1.5% as Investors Trade Guardedly

Proshare

Monday, March 01, 2021 / 05:02 PM / by Afrinvest Research / Header Image Credit: Getty Images


Proshare Nigeria Pvt. Ltd.


Last week, the Nigerian Treasury Bills ("NT-Bills") secondary market was quiet on all trading sessions due to the shift in market players' interest to the NT-Bills Primary Market Auction ("PMA") which held 24-Feb-21 and more attractive domestic bond offers. Thus, as anticipated, average yield across the curve closed flat with a mild bullish bias, down 2bps W-o-W to 1.49% from 1.51% the previous week.


Yields on all benchmark instruments remained unchanged W-o-W, save for a few mid-term NT-Bills like 29-Jul-21 which dipped 48bps on the back of big ticket demands. On the flip side, 15-Jul-21 (+8bps) and 26-Aug-21 (+6bps) slightly advanced W-o-W.

The scheduled NT-Bills PMA held last Wednesday, where the Apex bank rolled over a total of N128.2bn across the 91-, 182- and 364-Day tenors, received a total subscription of  N192.1bn  (1.5x oversubscription) as rates advanced 100bps on the 91-Day instrument and 150bps on both 182- and 364-Day NT-Bills.  


Please see more details below:

Auction Date

24-Feb-21

24-Feb-21

24-Feb-21

Allotment / Issue Date

25-Feb-21

25-Feb-21

25-Feb-21

Tenor

91-Day

182-Day

364-Day

Offer Amount (bn N)

20,372,790,000.0

55,850,000,000.0

51,995,029,000.0

Total Subscription (bn N)

27,576,790,000.0

40,058,313,000.0

124,417,721,000.0

Allotment (bn N)

24,175,790,000.0

32,705,313,000.0

90,376,116,000.0

Range of Bid Rates (%)

0.9500 - 8.0000

1.8000 - 9.5000

2.9300 - 10.5000

Previous Stop rates (%)
(10-Feb-21)

1.00

2.00

4.00

Stop Rates (%)
(24-Feb-21)

2.00

3.50

5.50

Subscription ratio

1.4x

0.7x

2.4x

Allotment ratio

0.9x

0.8x

0.7x


We expect calm trading at the start of this week however, the pressured liquidity position (N98.8bn short as at Friday, 26-Feb-21) should trigger sell-offs as market players fund their obligations. Our advice is to cautiously position in short-term bills while qualified investors may also take advantage of available Commercial Papers and cherry pick attractive domestic bonds.


Please see T-Bills rates below:

Maturity

Tenor (Days)

Rate (%) p.a.

Yield (%) p.a.

1-Jul-21

122

1.55

1.56

26-Aug-21

178

2.03

2.05

28-Oct-21

241

2.30

2.34

25-Nov-21

269

2.50

2.55

13-Jan-22

318

2.66

2.72

Rates are valid till 01:45pm today (01-Mar-21)
*Please note that the minimum subscription for T-Bills is N100,000.00


Commercial Papers

Please see below details of available Commercial Paper offers:


Dufil Prima Foods PLC

We are pleased to inform you that the Series 3 and 4 Commercial Paper issuance ("CP or the "Issuance"), under Dufil Prima Foods PLC's ("Dufil" or the "Issuer") NGN30 Billion programme is has been extended and is still open and scheduled to close on 03 March 2021. Dufil is no stranger to the debt capital markets, having issued an aggregate amount of NGN37 Billion in CPs between 2016 and 2020.


Please find below a summary of the Offer;

Issuer:

Dufil Prima Foods PLC

Series:

3

4

Tenor:

182-days

270-days

Target Size:

Up to N30.0bn across all tenors

Discount Rate:

4.4012%

5.7450%

Implied Yield:

4.5000%

6.0000%

Offer Opens:

Friday, 19 February 2021

Offer Closes:

Wednesday, 03 March 2021

Allotment Date:

Wednesday, 03 March 2021

Settlement Date:

Wednesday, 05 March 2021

Issuer Rating:

A- (GCR.); A- (DataPro);

Minimum Subscription:

N5 million

Tax Consideration:

Free and clear of withholding taxes



Proshare Nigeria Pvt. Ltd. 

United Capital Plc
We also wish to inform you of the launch of the United Capital Plc  ("United Capital" or the "Issuer") Series 4 Commercial Paper ("CP") issuance of up to N5.0bn under the Issuer's N20.0bn CP Programme.

 
United Capital is a leading financial services group in Africa listed on the Nigerian Stock Exchange, with excellent financial services in Investment Banking, Asset Management, Trusteeship, Securities Trading, Wealth Management and Consumer finance. The Issuer's audited financial statement for 2020 shows Gross Earnings of N12.8bn (up from N8.6bn in FY 2019), a 61.0% PAT margin and total assets of over
N222.7bn.
 
The proposed issuance will represent United Capital'
s third CP issuance following its successful issuances of N5.3bn & N15.0bn in April and November 2020 respectively.
 
Please see below the terms of the offer:

Issuer:

United Capital Plc

Series:

4

Tenor:

182 Days

Pricing Method:

Fixed Price

Target Size:

Up to N5 Billion

Discount Rate:

4.74%

Implied Yield:

4.85%

Offer Open:

March 01, 2021

Offer Close:

March 03, 2021

Allocation:

March 03, 2021

Funding Date:

March 04, 2021

Issuer/ Issue Rating:

'A' by DataPro Limited

'A-' by Agusto & Co. Limited

Minimum Subscription:

N5 million and multiples of N100,000 thereafter

Use of Proceeds:

Short-term working capital requirements

Tax Consideration:

Free and clear of withholding taxes



FGN Bonds Update: Bullish Outing as Average Bonds Yield Shed 18bps W-o-W to 9.2%

Performance in the local bonds space took a bullish turn last week, as bargain hunters took advantage of the current uptick in yields and buoyant liquidity levels (N695.3 positive as at Tuesday 23-Feb-21) due to inflows from coupon payments and OMO repayments, filtered through the markets. Accordingly, average yield across all instruments declined 18bps to 9.2% W-o-W.

In more detail, short and medium term bonds contracted 78bps and 12bps respectively following buy mandates on MAR-2025 (-181bps) and FEB-2028 (-12bps) bonds, respectively. However, long dated bonds sustained sell-offs especially on MAR-2036 (+69bps).


Please see indicative secondary market bond rates below:
 

Bond

Tenor (Years)

Yield (%)

Coupon (%)

Implied Price (N)

Apr-23

2

5.85

12.75

113.78

Mar-24

3

5.90

14.20

122.78

Mar-25

4

5.90

13.53

127.21

Jan-26

5

9.05

12.50

113.38

Mar-27

6

9.30

16.29

131.76

Feb-28

7

9.35

13.98

123.35

Jul-34

13

10.33

12.15

113.01

Mar-36

15

10.35

12.40

115.46

Apr-37

16

10.35

16.25

145.77

Apr-49

28

10.45

14.80

139.22

Rates are valid till 01:45pm today (01-Mar-21)
*Please note that the minimum subscription for FGN Bonds is N20,000,000.00

Our expectation this week is for yields to advance, particularly on medium to long term instruments as investors continue to anticipate higher returns and sell-offs persist. Thus, we advise investors to trade cautiously and position in shorter dated bonds   


Proshare Nigeria Pvt. Ltd.


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Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

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