Last week, the Nigerian Treasury Bills (“NT-Bills”) secondary market maintained its bearish run as investors anticipated Primary Market Auction (“PMA”) that held last Wednesday (8th-Jun-22). Consequently, the average yield in the local market advanced 16bps W-o-W to settle at 4.13% from 3.97% the previous week.
In more detail, the average yield on the short and long-term bills advanced 12bps and 28bps W-o-W respectively due to sell-offs on the 28-Jul-22 (+75bps W-o-W), and 27-Apr-23 (+109bps W-o-W) instruments.
At the PMA, the Apex bank offered a total of N167.2bn across the 91-, 182- and 364-Day instruments. The offer maintained a significant level of demand as it recorded a total bid-to-cover ratio of 2.2x (₦167.2bn offer vs. ₦361.9bn subscription). Furthermore, stop rates on the 91-Day bill was maintained at 2.50% while the 182-Day and 364-Day maturities contracted by 5bps to close at 3.84% (from 3.89%) and 6.44% (from 6.49%) respectively from previous auction.
Please see a detailed summary of the NT-Bills PMA below:
Auction Date | 08-Jun-22 | 08-Jun-22 | 08-Jun-22 |
Allotment / Issue Date | 09-Jun-22 | 09-Jun-22 | 09-Jun-22 |
Tenor | (91-Day) | (182-Day) | (364-Day) |
Offer (N) | 2,323,500,000.00 | 789,100,000.00 | 164,106,064,000.00 |
Subscription (N) | 1,021,650,000.00 | 6,982,229,000.00 | 353,898,665,000.00 |
Allotment (N) | 766,650,000.00 | 1,935,259,000.00 | 179,890,081,000.00 |
Range of Bid Rates (%) | 2.4900-3.7500 | 3.5000-6.3300 | 4.5000-10.1000 |
Stop Rates (%) | 2.50 | 3.84 | 6.44 |
Previous Stop Rates (%): | 2.50 | 3.89 | 6.49 |
Subscription Ratio: | 0.4x | 8.8x | 2.2x |
Allotment Ratio | 0.8x | 0.3x | 0.5x |
This Wednesday, the Apex bank is scheduled to rollover N34.9bn worth of maturing NT-bills across the 91-, 182- and 364-Day offers.
Please see below details of the upcoming PMA:
Auction Date | 15-Jun-22 | 15-Jun-22 | 15-Jun-22 |
Allotment Date | 16-Jun-22 | 16-Jun-22 | 16-Jun-22 |
Tenor | 91-Day | 182-Day | 364-Day |
Offer Amount (₦') | 5,911,100,000.00 | 1,101,951,000.00 | 27,868,646,000.00 |
Last Stop Rate (%) | 2.50 | 3.84 | 6.44 |
Expected Stop Rate Range (%) | 2.50% - 3.00% | 3.5% - 4.0% | 6.30% - 6.50% |
This week, we anticipate weaker demand levels at the secondary market as investors anticipate the upcoming PMA slated for Wednesday, given the expected tight liquidity levels (₦16.6bn negative as of today, 14-Jun-22). We therefore advise investors to trade on relatively attractive maturities across the curve and other corporate issues on offer.
Please see indicative secondary market NT-Bills rates below:
Maturity | Tenor (Days) | Gross Rate (%) p.a. | Yield (%) p.a. |
14-Jul-22 | 30 | 3.65 | 3.66 |
25-Aug-22 | 72 | 5.35 | 5.41 |
8-Sep-22 | 86 | 5.70 | 5.78 |
13-Oct-22 | 121 | 5.75 | 5.86 |
10-Nov-22 | 149 | 5.75 | 5.89 |
9-Feb-23 | 240 | 5.60 | 5.81 |
Rates are valid till 01:45pm today (14-Jun-22)
*Please note that the minimum subscription for NT-Bills is N100, 000.00
FGN Bonds Update: Bullish Performance as Average Yield Declines 3bps W-o-W to 11.13%
Last week at the FGN bonds secondary market, performance turned mildly bullish toward the end of the week as pockets of demand was witnessed across most tenors. As a result, average FGN Bond yields declined 3bps W-o-W to 11.13% from 11.16% the previous week.
Consequent on this, the mid-dated maturities such as 26-Apr-29 and 22-May-29 which declined by 23bps and 21bps W-o-W respectively witnessed the most buying interest. On the flip side, the short-term bonds such as the 14-Mar-24 maturity recorded the most sell-offs as yield advanced by 35bps.
This week, we expect to demand levels to wane in the secondary market against the backdrop of tighter liquidity levels this week and as continue investors anticipate improved supply and yields. Thus, we advise investors to take position in maturities across all offers with yields that have advanced on the week in the secondary market while staying alert for fundamentally sound corporate primary issues.
Please see indicative secondary market bonds rates below:
Maturity | Tenor (Years) | Yield (%) | Coupon (%) | Implied Price (N) |
Mar-24 | 1.7 | 7.20 | 14.20 | 111.28 |
Mar-25 | 2.7 | 9.40 | 13.53 | 109.84 |
Jan-26 | 3.6 | 9.60 | 12.50 | 108.65 |
Mar-27 | 4.7 | 10.05 | 16.29 | 123.09 |
Feb-28 | 5.6 | 10.05 | 13.98 | 116.69 |
Jul-34 | 12.1 | 11.50 | 12.15 | 104.16 |
Mar-36 | 13.7 | 11.87 | 12.40 | 103.51 |
Apr-37 | 14.8 | 11.90 | 16.25 | 129.93 |
Apr-49 | 26.8 | 12.60 | 14.80 | 116.76 |
Rates are valid till 01:45 pm today (14-Jun-22)
*Please note that the minimum subscription for FGN Bonds is N20,000,000.00