The Nigerian Treasury Bills (“NT-Bills”) secondary market closed the previous week on a bullish note, on the back of improved system liquidity which stood at N97.7bn long as of Friday 23-Sep-22. Weak sentiment was witnessed across the curve and as a result average yields dipped 15bps to close at 7.42% from 7.57% recorded in the past week.
 
Furthermore, mild buying interest was witnessed across all tenors. Particularly, the 27-Oct-22 maturity dipped the most as its yield contracted by 21bps to settle at 5.83% W-o-W.
This Wednesday 28-Sep-22, the Apex bank is scheduled to roll over bills worth ₦141.34bn across the 91-, 182- and 364-Day instruments in the Primary Market Auction (PMA).
 
Please see below our PMA expectations:

 
Going into the week, we expect the market to remain quiet, however, with mild activities prior to the outcome of the PMA. Thus, we advise investors to trade cautiously prior to the outcome of the PMA and take advantage of attractive offers from corporates to bridge inflation gap.
 
Please see indicative secondary market NT-Bills rates below:

Rates are valid till 01:45pm today (26-Sept-22)
 
*Please note that the minimum subscription for NT-Bills is N100, 000.00
 
FGN Bond Update: Average Yield rose by 15bps W-o-W to 12.88%
 The domestic bond secondary market closed the previous week on a negative note, following the outcome of the PMA bond auction which was conducted last Monday (19-Sep-22).  As a result, average FGN Bond yields rose by 15bps W-o-W to 12.88% from 12.73% in the past week.
 
A further breakdown shows that average yields on the short and long termed instruments (11.87% and 12.78%) witnessed the most sell-off interest (41bps W-o-W) and (7bps W-o-W) as yields on MAR-2024, JAN-2026, and APR-2037 expanded by 110bps, 43bps and 76bps W-o-W respectively.
 
Last week, the Debt Management office (“DMO”) offered a total of N225.0bn across the MAR 2025, APR 2032 and APR 2037 maturities. The APR-2037 maturity re-opening after one year enjoyed a significant level of demand as it recorded a bid-to-cover ratio of 1.94x, while total bid-to-cover printed at 1.10x.
 Consequently, marginal rates on the 2025 and 2032 instruments expanded 108bps and 103bps respectively.
 
Please see a detailed summary of the FGN bond PMA result below:

This week, the Monetary Policy Committee (MPC) is scheduled to hold its meeting starting today Monday 26-Sep-22 to Tuesday 27-Sep-2022. We expect yields in the secondary market to maintain status quo as investors’ appetite for high yield instruments due to soaring inflation rate intensifies. We therefore reiterate our advice that investors take advantage of maturities with relatively attractive yields across the curve.
 
Please see below FGN bonds secondary market rates:

Rates are valid till 01:45pm today (26-Sept-22)
 

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