Market | Bonds & Fixed Income

NT-Bills Update: Mild Buying Interests as Average Yield Decline 7bps WoW to 7.86%.

Aug 22, 2022   •   by Afrinvest Research   •   Source: Afrinvest   •   eye-icon 304 views

Last week, the Nigerian Treasury Bills (“NT-Bills”) secondary market witnessed a mixed sentiment as average yield dipped by 7bps W-o-W to settle at 7.86% from 7.93% the previous week.
Furthermore, the short- and long-term instruments witnessed the most buying interest as their average yields (8.42% and 6.34%) declined 53bps and 13bps respectively. Specifically, the 13-Oct-22(-37bps W-o-W), and 09-MAR-23 (-5.12bps W-o-W) depreciated the most.

On Wednesday (24-August-22), the Apex bank is scheduled to roll over maturing bills worth ₦149.60bn at the NT-Bills Primary Market Auction (“PMA”) across the 91-, 182-, and 364-Day tenors.

Please see a detailed summary of the FGN bond PMA below:

This week, we expect the bearish trend to resurface at the beginning of the week. However, fade out towards the end as investors cover their unfilled positions as system liquidity stood at ₦130.170bn short on Friday 19th August 2022. 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 (22-Aug-22)

*Please note that the minimum subscription for NT-Bills is 100,000.00

FGN Bonds Update: Bearish Run as Average Yield Increased by 13bps W-o-W to 12.82%

The domestic bonds secondary market witnessed a bearish run last week as investors anticipated the FGN bond auction which was conducted last Monday (15-August-22).  Consequently, average FGN Bond yields increased 13bps W-o-W to settle at 12.82% from 12.69% the previous week.
A further breakdown shows that average yields on medium and long tenored instruments (12.76% and 13.60%) witnessed the most sell off (-9bps W-o-W) and (-18bps W-o-W) as yields on APR-2029, APR-2049 and MAR-2050 expanded 15bps, 28bps and 35bps W-o-W respectively.
At the PMA, the Debt Management Office (“DMO”) offered a total of ₦225.0bn on the FGN MAR 2025, FGN APR- 2032 and FGN JAN-2042 instruments. The offers enjoyed a significant level of demand as it recorded a total bid-to-cover ratio of 1.10x. However, the DMO under-allotted due to aggressive bids from investors leading to higher marginal rates on all offers. As a result, marginal rates on the 2025, 2032 and 2042 instruments expanded 12.5bps, 13.5bps and 14bps respectively.
Please see a detailed summary of the FGN bond PMA below:


Going into the week, we expect active trading sessions as investors continue to fill lost bids from the PMA. We also anticipate bond coupon payment of N66.80bn this week. We, therefore, advise investors to take advantage of maturities with relatively attractive yields across the curve.

Please see below FGN bonds secondary market rates:

Rates are valid till 02:00pm today (22-Aug-22)
*Please note that the minimum subscription for FGN Bonds is 20,000,000.00

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