NT-Bills Update: Bullish Turn, as Average Yield Falls 19bps WoW

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Monday, July 19, 2021 / 05:17PM / by Afrinvest Research / Header Image Credit: Pexels

 

The Nigerian Treasury Bills ("NT-Bills") secondary market last week turned bullish on the back of improved system liquidity (N66.14bn long on Friday) with average yield across instruments dipping 19bps W-o-W to close at 6.69%. Precisely, improved buying interest was seen on the mid- and long-dated maturities as yields contracted 54bps and 34bps W-o-W respectively while sell-offs were recorded on short-term bills, as average yield advanced 31bpsW-o-W.

At the Primary Market Auction ("PMA") last week, the Apex Bank allotted a total of N150.00bn across all tenors with the 91- and 182-Day bills retaining their previous stop rates of 2.50% and 3.50% respectively, while the 364-Day bill declined 48bps to 8.67%.

Please see details below:


Auction Date

14-Jul-21

14-Jul-21

14-Jul-21

Allotment Date

15-Jul-21

15-Jul-21

15-Jul-21

Tenor

91-Day

182-Day

364-Day

Offer (N)

12,459,707,000

25,372,322,000

71,598,126,000

Subscription (N)

6,693,437,000

11,817,979,000

556,164,803,000

Allotment (N)

5,239,058,000

7,459,979,000

137,300,963,000

Range of Bids (%):

2.5000 - 10.0000

3.4900 - 12.0000

8.1500 - 9.7500

Previous Stop rates:

2.5

3.5

9.15

Stop Rates (%):

2.5

3.5

8.67

Bid-to-Cover Ratio

1.3x

1.6x

4.1x

Subscription Ratio

0.5x

0.5x

7.8x

 


In this week's 3-Day trading session, we expect calm activity in the NT-Bills space as market participants trade cautiously, despite improved system liquidity. 
Thus, we advise investors to position in relatively attractive yields across the curve. Additionally, qualified investors may take advantage of available Commercial Paper.


Proshare Nigeria Pvt. Ltd.


Please see the indicative secondary market NT-Bills rates below:

Maturity

Tenor (Days)

Rate (%) p.a.

Yield (%) p.a.

28-Oct-21

101

3.55

3.59

25-Nov-21

129

4.35

4.42

13-Jan-22

178

4.63

4.74

10-Mar-22

234

5.35

5.54

28-Apr-22

283

5.94

6.23

26-May-22

311

6.96

7.40

09-Jun-22

325

7.16

7.65

Rates are valid till 01:45 pm today (19-Jul-21)

*Please note that the minimum subscription for NT-Bills is N100,000.00


 
FGN Bonds Update: PMA Holds Today; Average Yield Inch 9bps Higher W-o-W to 11.66%

 
The FGN bond secondary market closed marginally negative  last week as average yield across all instruments improved 9bps to settle at 12.16% (from 12.07% the previous week). Most buying interests were seen on the JAN-22, MAR-24, and MAR-25 instruments as their respective yields contracted 139bps, 10bps, and 6bps W-o-W.

The Debt Management Office ("DMO") is slated to conduct a PMA as it re-opens the FEB 2028MAR 2036, and MAR 2050 instruments.

Please see details of the bonds auction below:

Bond Name

13.98% FGB FEB 2028 (Re-opening)

12.40% FGB MAR 2036 (Re-opening)

12.98% FGN MAR 2050 (Re-opening)

Term-To-Maturity

6 Years, 7 Months

14 Years, 8 Months

28 Year, 8 Months

Range of Amount on Offer (N'Bn)

50 - 60

50 - 60

50 - 60

Original Tenor

10-Year

20-Year

30-Year

 

Please see indicative secondary market bonds rates below:

Bond

Tenor (Years)

Yield (%)

Coupon (%)

Implied Price (N)

Apr-23

2

9.50

12.75

105.15

Mar-24

3

10.30

14.20

108.82

Mar-25

4

10.30

13.53

109.64

Jan-26

5

10.80

12.50

105.94

Mar-27

6

11.60

16.29

119.02

Feb-28

7

11.65

13.98

110.50

Jul-34

13

12.00

12.15

100.97

Mar-36

15

12.15

12.40

101.65

Apr-37

16

12.10

16.25

128.84

Apr-49

28

12.20

14.80

120.46

Rates are valid till 01:45 pm today (19-Jul-21) 
*Please note that the minimum subscription for FGN Bonds is N20,000,000.00


This week, we expect to see reduced activity in the FGN bonds secondary market as investors focus on the upcoming PMA. Therefore, we advise investors to take advantage of maturities that advanced along the curve


Proshare Nigeria Pvt. Ltd.


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 Proshare Nigeria Pvt. Ltd.

 

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