Short-term Bills Remain Attractive Amid Increased Buying Interest


November 6, 2017/Afrinvest Research 

The Treasury Bills (“T-Bills”) market performance was bullish last week after 3 consecutive weeks of sell-off traceable to improved system liquidity which triggered buying interest. As a result, average yield on benchmark bills declined 38bps W-o-W to close 17.5% as against 17.9% the previous week. 

At the T-Bills Primary Market Auction last Wednesday, A total of N100.8bn was allotted and investors positioned more at the longer end of the curve. Nonetheless, rates stayed around the same level. The 91-day, 182-day and 364-day stop rates were 13.1%, 15.3% and 15.6% respectively. 

Please see below indicative rates and tenors for today:

Maturity Tenor (Days) Rate (%) p.a.
07-Dec-17 31 14.50
11-Jan-18 66 15.60
01-Feb-18 87 15.00
05-Apr-18 150 16.10
26-Jul-18 262 15.00

Please note that the rates are valid till 2pm today (06-Nov-17) 

This week, an OMO maturity of N233.8bn is expected to hit the system which will sustain investors’ buying interest. Consequently, we anticipate further drop in rates especially at the short and medium spectrum of the yield curve. 

Notwithstanding, we expect that the Apex Bank will sustain its intermittent OMO auctions for short and medium dated bills.