Investors swoop on treasury bills due to no action in OMO

INVESTORS TURNED TO THE TREASURY BILLS segment of the money market as the Central Bank of Nigeria did not conduct its open market operation (OMO) auction last week.

As a result, trading in the treasury bills secondary market remained bullish, despite the liquidity pressures witnessed in the system. Average yield across all instruments contracted by 15bps to 3.4%. Similarly at the NTB segment, average yield contracted by 4bps to 1.7%, as retail demand spurred the activities in the space.

This week, bullish sentiments are expected to persist across the treasury bills space. In the NTB segment, participants focus will shift towards next week’s primary market auction where the CBN will be rolling over NGN56.78 billion worth of instruments maturing.

The previous week, the Central Bank of Nigeria rolled over treasury bills worth N49.84 billion of the 91-day, N54.59 billion of the 182-day and N161.52 billion of the 364-day - at respective stop rates of 1.20 percent, 1.50 percent, and 3.40 percent. The was done through the primary market auction.

Then, trading in the Treasury bills secondary market was bullish, on the back of the still buoyant system liquidity. Thus, the average yield across all instruments contracted by 29bps to 3.5 percent. Across the segments, average yield at the OMO segment contracted by 41bps to 4.2 percent whereas they expanded slightly by 1bp to 1.7% at the NTB segment, as market participants shifted focus to this week’s PMA. At the PMA, the CBN offered to investors maturing bills worth NGN265.95 billion.