The bearish sentiments in Treasury
Bills (“T-Bills”) secondary market ceased last week, following robust
system liquidity (c.
N704.7bn positive as at Friday) that incited local
demand across the yield curve. As a result, activities were largely bullish
during the five trading sessions of the week as investors rallied for higher
yields despite the CBN intervention at the Primary Market auction(“PMA”)
on Wednesday as well as its Open Market Operations (“OMO”)
auction on Thursday and Friday.
Major buying interests were witnessed at the short and medium end of the curve, particularly the 5-Dec-19 (-231bps), 9-Jan-20 (-228bps) and 24-Oct-19 (-205bps) maturities. Consequently, average yield across all tenors contracted by 140 bps W-o-W to settle at 13.8% from 15.2% the previous week.
At the PMA which held on Wednesday, the CBN offered
worth of T-Bills as against the N347.8bn total subscription, translating
to a bid to cover ratio of 1.7x vs 4.3x at the previous auction. All tenors
were oversubscribed with the 364-day instrument enjoying the most interest.
Consequently, the marginal rates across all tenors inched higher by 1.4%, 0.2%
and 0.9% respectively as the CBN fully allotted to the total amount offered.
Please see a detailed summary in the table below:
|Allotment / Issue Date||29-Aug-19||29-Aug-19||29-Aug-19|
Offer Amount (||24,372,790,000||38,751,846,000||145,475,021,000|
Total Subscription (||29,077,546,000||46,150,870,000||272,541,557,000|
|Range of Bid Rates (%)||9.2000-12.4990||11.000-15.000||11.8922-14.3199|
|Stop Rates (%)||11.1000||11.5878||12.8900|
|Previous Stop Rates (%)||9.7000||11.3500||12.0000|
On Thursday, the CBN conducted an OMO auction, offering a total of
across the 91, 189 and 364day instruments. However, subscription levels
remained scanty despite an increase in the stop rates, as investors preferred
more attractive rates in the secondary market. Thus, the three tenors offered
recorded a bid-to-cover ratio of 0.13x, 0.07x and 1.45x, respectively.
Similarly, the CBN’s OMO intervention on Friday saw a total offering of
albeit across the 90, 188 and 363day instruments. This was met with a total
subscription of N237.13bn, showing a 0.05x, 0.03x and 1.14x bid to cover
ratio across the short, medium and long-term bills respectively.
Notwithstanding, stop rates trended closely to that of the previous day
auction, save for the 364 day bill which improved slightly.
Going into this week, we expect the momentum in demand to be sustained as inflows from maturing OMO bills (
N204.1bn) is expected to hit the
financial system which will further bolster liquidity. Nevertheless, we expect
the CBN to maintain its pace of excess liquidity mop-ups to keep system
liquidity in check.
Investors are therefore advised to take position in T-Bills and OMO offers with attractive yields.
Please see indicative secondary market T-Bills rates below:
|Maturity||Tenor (Days)||Rate (%) p.a.||Yield (%) p.a.|
Rates are valid till 01:45pm today (2-Sept-19)
*Please note that the minimum
subscription for T-Bills is
How do I fund my account?
You can make transfers for Treasury Bills (T-Bills), Shares, FGN Savings Bond and FGN Bonds directly from your bank account using your online banking platform through NIBBS E-Bills Pay (Read FAQs). The banks currently enabled are Guaranty Trust Bank, First Bank, Stanbic IBTC, Wema Bank and Zenith Bank.
Kindly follow the steps below to start investing with E-Bills Pay:
- Log into your bank’s online platform
- Click on NIBSS E-Bills payment and select Afrinvest Securities from the drop-down list of billers/merchants.
- Select the product you want to invest in (Treasury Bills, FGN Bonds etc)
- Enter your Afrinvest Securities Account Number, the amount you want to invest and pay.
Your Afrinvest Securities account
will be automatically credited for your preferred investment
NOTE: Payment should ONLY be made to Afrinvest Securities Limited Client bank accounts
FGN Bonds Market Update: Renewed Local Demand Pressures Average Yield down by 40bps W-o-W
In the bonds space, performance mirrored the bullish T-Bills markets as domestic investors took position across the yield curve coupled with a reduced momentum in sell-offs by foreign investors. Consequently, average yield declined 40bps to settle at 14.0% from 14.4% the previous week.
Major buying interests were witnessed at the short and medium tenors particularly the 14-Feb-20 (-170bps), 14-Mar-20 (-155bps) and 27-Jan-22 (-60bps) maturities.
Going into this week, The Debt Management Office (“DMO”) is scheduled to auction the 2 and 3-year tenor FGN savings bond for the month of September at 11.150% and 12.150% respectively.
Furthermore, we expect the spill-over effect from the T-Bills market to drive momentum in the Bonds market on the back of improved system liquidity. Investors are therefore advised to take advantage of bonds with attractive yields and trading at a discount.
Please see indicative FGN bond rates below:
|Bond||Tenor (Years)||Yield (%)||Coupon (%)||Implied Price|
Rates are valid till 01:45pm today (2-Sept-19)
*Please note that the minimum subscription for Bonds is
To invest in FGN Bonds or T-Bills, send an email to – email@example.com