T-bills Market Currently Volatile as PMA Holds on Wednesday; Indicative Rates (16-Apr-18)


April 16, 2018/Afrinvest

Last week, performance in the Treasury bills (“T-Bills“) market maintained its bullish trend for the third consecutive week this month as investors continue to take positions across all tenors.

Consequently, average yield across all tenors declined 56bps W-o-W to close at 13.78 % on Friday. It is worthy of note that the 26-Apr-18 maturity gained 64bps W-o-W to close at 12.96% from 12.33% the previous week while the 10-May-18 maturity declined 214bps to close at 12.25% from 14.39%.

Please see available rates for today below:

Maturity Rate (%) p.a. Tenor (Days)
31-May-18 8.50 45
21-Jun-18 11.20 66
19-Jul-18 10.00 94
09-Aug-18 9.80 115
06-Sep-18 10.30 143
25-Oct-18 10.50 192
06-Dec-18 12.50 234
OMO Auction 13.00 200-300
Please note that rates are valid till 1:30pm today (16-Apr-18)
This week, a Primary Market Auction is slated to hold on Wednesday with the CBN offering N58.4bn (vs. N116.9bn maturing) following the Federal Government’s plan to reduce the amount being rolled over in a bid to reduce its domestic debt.

On the back of this, we anticipate a bullish performance at the auction particularly the 364-day tenor as investors take position to hedge against further rate decline. Please see stop rates for the last auction below:

Tenor (Days) Stop Rate (%)
91 11.75
182 12.70
364 13.04
The T-bills market is currently volatile on the back of an expected improved system liquidity as OMO maturity of N272.1bn and T-bills maturity of N73.1bn are expected to hit the system on Thursday. However, we expect rates to moderate higher towards the end of the week as the Apex bank mops up excess system liquidity via an OMO auction.


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