The Nigerian Treasury Bills ("NT-Bills") secondary market concluded the preceding week with a bearish performance, despite system liquidity closing long at ₦146.22bn as of Friday, 17-Feb-2023. As a result, the average yields experienced a significant expansion of 255bps W-o-W, settling at 4.03% compared to the previous week's 1.48%.

Sell-offs were witnessed across all tenors as average yields for the short, medium, and long dated instruments expanded 255bps, 307bps, and 101bps W-o-W respectively. Specifically, the 25-May-23, 9-Mar-23 and 27-Apr-23 expanded the most as their average yield advanced 386bps, 346bps and 341bps respectively.

This Wednesday 22-Feb-23, the Apex bank is scheduled to roll over a total of ₦263.50bn through the NT-bill Primary Market Auction (“PMA”) across the 91-, 182- and 364 Day Instruments.
 
Please see below our PMA expectations: 

This week, we expect the activity levels in the NT-Bills secondary market to improve, given the expected improvement in liquidity levels from maturing instruments (NT-Bills: N263.50bn, OMO bills: N70.0bn) in the financial system. Therefore, we advise investors to take advantage of the relatively attractive bills along the curve, while also remaining alert for more commercial paper offerings that might be announced.

Please see indicative secondary market NT-Bills rates below: 

Rates are valid till 01:45pm today (20-Feb-23)
*Please note that the minimum subscription for NT-Bills is N100,000.00

FGN Bond Update: Bullish Run Halts as Average Yield advanced 19bps W-o-W to 13.26%

Similarly, the domestic bond market experienced a negative performance as investors reacted to the January inflation figures which increased to 21.82%. Consequently, the average yield expanded by 19bps W-o-W, settling at 13.26% compared to the previous week's 13.08%

 The short and mid-term dated instruments were the most affected by the selloffs, with the APR-2023, MAR-2024, and JAN-2026 instruments expanding by 248bps, 40bps, and 27bps respectively.
 
At the PMA that was held last week Monday(13-Feb-2023), the Debt Management Office (“DMO”) offered a total of ₦360.0bn on the FGN APR 2028, FGN APR 2032, FGN APR 2037 and FGN APR 2049 instruments. The offer enjoyed a significant level of demand as it recorded a total bid-to-cover ratio of 0.4x. Furthermore, average marginal rates advanced by 27bps to settle at 15.42% from 15.15% at the last auction.

Please see below our PMA expectations: 

Going into the week, we anticipate increased buying interest, as outstanding funds from local investors from the previous auction, filter into the secondary market. As a result, we recommend that investors take advantage of maturities with improved yields across the curve, especially at the short end of the curve

 
Please see below FGN bond secondary market rates: 

Rates are valid till 01:45pm today (20-Feb-23)
*Please note that the minimum subscription for FGN Bond is N20, 000,000.00