LATEST UPDATES
Card-image-cap

Market | Bonds & Fixed Income

NT-Bills Update: Bullish Sentiment Resurface as Average Yield Dipped 200bps WoW to 1.47%

Jan 30, 2023   •   by   •   Source: Afrinvest   •   eye-icon 156 views

The Nigerian Treasury Bills (“NT-Bills”) secondary market closed the previous week on a bullish note supported by buoyant system liquidity (which stood at N969.3bn long as of Wednesday). As a result, average yield dipped by 200bps to close at 1.47% from 3.47% recorded in the past week.


Buying interest was witnessed across all tenors as average yield contracted across the curve.  Specifically, the 23-Feb-23 (137bps), 8-Jun-23 (209bps) and 26-Oct-23 (432bps) contracted the most.
  

At the Primary Market Auction (PMA), last week Wednesday, 25-Jan-23, the Apex bank offered a total of ₦220.5bn across the 91-, 182- and 364-Day instruments. The offer recorded an oversubscription on all tenor as it recorded a total bid-to-cover ratio of 4.73x (₦220.5bn offer vs. ₦1.004tn subscription). In further details, the stop rates on the 91-days,182-days and 364-days declined by 171bps, 253bps and 252bps respectively to close at 0.29%, 1.80% and 4.78%.


Please see a detailed summary of the NT-Bills PMA below:

Auction Date

25-Jan-23

25-Jan-23

25-Jan-23

Allotment / Issue Date

26-Jan-23

26-Jan-23

26-Jan-23

Tenor

91-Day

182-Day

364-Day

Offer Amount (₦' bn)

1,737,750,000.00

1,263,250,000.00

217,532,850,000.00

Subscription (₦' bn)

94,250,379,000.00

89,616,338,000.00

860,352,804,000.00

Allotment (₦' bn)

1,737,750,000.00

1,263,250,000.00

217,532,850,000.00

Range of Bid Rates (%)

0.29 – 4.50

1.80 – 5.34

3.96 – 13.43

Previous Stop rates (%)

2.00

4.33

7.30

Stop Rates (%)

0.29

1.80

4.78

Subscription ratio

54.2x

70.9x

4.0x

Allotment ratio

0.0x

0.0x

0.3x


This week, we anticipate sustained bullish sentiment on the back of continued improved system Liquidity (which stood at N1.1tn long as of Friday). Thus, we maintain our advice to investors to trade cautiously and take advantage of relatively attractive bills across the curve along with offers from corporates.
 
Please see indicative secondary market NT-Bills rates below:

Maturity

Tenor (Days)

Rate (%) p.a.

Yield (%) p.a.

8-JUN-23

129

2.30

2.30

10-AUG-23

192

3.15

3.20

26-OCT-23

269

4.20

4.35

23-N0V-23

297

4.70

4.85

28-DEC-23

332

5.25

5.55

11-JAN-23

346

5.50

5.80

Rates are valid till 01:45pm today (30-Jan-23)

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


FGN Bond Update: Bearish Run Halts as Average Yield declined by 31bps W-o-W to 13.11%

Similarly, the Bulls dominated the domestic bond secondary market as bearish run halted despite the 100bps increase in the Monetary Policy Rate (MPR) by the Monetary Policy Committee at its first policy meeting held this year. Thus, average yield contracted by 31bps W-o-W to 13.11% from 13.42% in the past week.
 
A further breakdown shows that demand was witnessed majorly at the short end of the curve, as average yields dipped by 101bps. This is evident in the MAR-2024 and APR-2023 maturities as yields declined by 280bps and 136bps W-o-W respectively. On the other hand, average yield at the mid and long end of the curve closed flat at an average of 13.88% and 15.00% evident in the MAY-2029 & APR-2049 maturities as yield remained unchanged at 13.79% & 15.36% respectively
 
Today, Monday 30 -Jan-23, at the Primary Market Auction (PMA) the Debt Management office (“DMO”) will be offering a total of N360.00bn across the FEB-2028, APR-2032, APR-2037, and APR-2049 maturities.
 
Please see below our PMA expectations:

BONDS

13.98% FGN FEB 2028

12.50% FGN APR 2032

16.2499% FGN APR 2037

14.80% FGN APR 2049

(Re-opening)

(Re-opening)

(Re-opening)

(Re-opening)

Term to Maturity

5 Years, 1 Month

9 Years, 3Months

14 Years, 3Months

26 Years,3Months

Offer Amount (₦' bn)

90,000,000,000.00

90,000,000,000.00

90,000,000,000.00

90,000,000,000.00

Last Stop Rate (%)

11.60%

14.75%

15.80%

14.20%

Expected Stop Rate Range (%)

11.00 – 13.50

14.00 – 15.50

15.00-16.50

14.00-15.50





This week, we expect to see continued buy interest, as investors continue to demand for maturities with attractive yield considering the hike in the benchmark interest rate. We therefore advice investors to take advantage of maturities with relatively attractive offers in the secondary market particularly at the short end of the curve.

Please see below FGN bond secondary market rates:

Bond

Tenor (Years)

Yield (%)

Coupon (%)

Implied Price (N)

MAR-24

1.1

7.10

14.20

107.51

MAR-25

2.1

10.14

13.53

106.36

JAN-26

2.9

11.55

12.50

102.33

MAR-27

4.1

12.67

16.29

111.32

FEB-28

5.0

12.92

13.98

103.83

JUL-34

11.4

13.79

12.15

90.67

MAR-36

13.1

14.22

12.40

89.27

APR-37

14.2

14.60

16.25

109.71

Rates are valid till 01:45pm today (30-Jan-23)

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

Related items.

Get the App

apple-store  play-store

Connect with us


Proshare is a professional practice focused on delivering research and information services to bridge the gap between investors and markets; by delivery on credible, reliable, and timely engagements through the following areas — Impact Research, Market Intelligence, Strategic Advisory, Stakeholder Relations & Digital Media.