Increased trading Friday as investors cover lost bids, reinvest N133.97bn maturing Nt-bills

Nigeria’s money market may witness increased trading activities after the holiday as investors are expected to cover lost bids from the Primary Market Auction (PMA) and seek to re-invest maturing Nt-bills worth N133.97 billion.

The Central Bank of Nigeria (Cbn)onwednesdayofferedntBills worth N113.97 billion across the 91-day (N10.00 billion), 182day (N17.60 billion), and 364-day (N86.37 billion) tenors.

Ayodeji Ebo, investment professional based in Lagos said the stop rates declined marginally across all tenors on high subscription level. The 364-day bill dropped to 2.8 percent.

Nigeria’s treasury bills market closed on a positive note on Wednesday with average yield across the curve declining by 2 bps to close at 1.85 percent from 1.87 percent on the previous day. Average yields across short-term and medium-term maturities compressed by 1 basis point and 7 bps, respectively, due to maximum buying interest witnessed in the NTB 25-Feb-21 (-10 bps) and NTB 11-Feb-21 (-9 bps) maturity bills, a report by FSDH research stated.

“The era of high returns from Nigerian Treasury Bills ended in 2019. Today, investors need to invest in a variety of other asset classes in order to obtain a reasonable return, without becoming totally exposed to any one asset class. That means that investment management is more complex and more necessary than before. Second, there is need for more information on fund performance in order to facilitate fund selection by investors and professional advisers. Fortunately, the industry and its regulator are moving in this direction, preparing the ground for a hugely expanded Mutual Fund industry in future, and creating the conditions for a significant capital base for the nation,” Guy Czartoryski, head of research at Coronation Asset Management, said.