Healthy liquidity, primary auction performance drive NTB market to bearish close

THE TREASURY BILLS MARKET opened last week on a bullish note, however, there was a reversal in the trend following the release of the primary auction results, wherein stop rates came in higher than expected, resulting to no sales at OMO auction, and amidst still healthy liquidity led to the bearish sentiments at the end of the week. Consequently, average yield rose by 5 basis point week-on-week to 12.20 percent.

Investor sentiment was negative across the mid (+29 bps) and long (+58 bps) ends of the curve, amid selloffs of the 97DTM (+ 90 bps) and 321DTM (+102 bps) bills, respectively. Conversely, yield contracted at the short (-29 bps) segment, driven by demand for the 13DTM (- 29 bps) bill.

At last week’s NTB auction, the CBN fully allotted N206.95 billion worth of bills N24.96 billion of the 91-day, N44.99 billion of the 182day and N137.00 billion of the 364- day at respective stop rates of 11.00 percent (previously 10%), 12.30 percent ( previously 10.40%), and 13.05 percent (previously 11.22%). Compared to the previous auction, stop rates increased by an average of 158 basis points, following weak demand.