Weekly Update on NT-Bills [23.96% down 26bps] and FGN Bond [19.41% down 8bps]

Weekly Update on NT-Bills [23.96% down 26bps] and FGN Bond [19.41% down 8bps]
(Source: Afrinvest Securities Limited, Date: 11-Nov-2024)

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The Bears Hibernate as Average Yield Declines 26bps W-o-W to close at 23.96%

Last week, the NT-Bills secondary market witnessed a bullish sentiment, as improved liquidity (which stood at ₦237.5bn long as of Tuesday 5-Nov-24) drove market sentiment. As a result, the average yield declined 26bps w-o-w to settle at 23.96% from 24.22% recorded in the previous week.

Demands were recorded across all ends of the yield curve, however investors focused on the mid end of the curve. This is evident in the 8-MAY-2025 and 24-APR-2025 bills which witnessed the most buying interest as their average yields contracted by 157bps and 151bps respectively.

At the Primary Market Auction (...PMA" ) which held on Wednesday 6-Nov-2024, the Debt Management Office (...DMO" ) offered a total of ₦513.4bn across the 91-, 182- and 364-Day instruments. The offer maintained a significant level of demand tilted towards the longer-dated bill indicating the market's response to a higher interest rate climate. The total bid-to-cover ratio stood at 1.24x (₦487.24bn offer vs. ₦608.93bn subscription). As a result, stop rates increased by 100bps for the 91-day and 182-day bills, reaching 18.00% and 18.50%, respectively, and by 235bps for the 364-day bill, closing at 23.00%.

Please see a detailed summary of the NT-Bills PMA below:

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This week, we expect a sustained bullish run, as system liquidity continues to dictate market tune, also as investors take advantage of elevated yield, especially on the long-dated bills. Thus, we advise investors to look out for relatively attractive bills across the curve, as well as possible commercial paper offerings.

Please see indicative secondary market NT-Bills rates below:

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Rates are valid till 2:00pm today (11-Nov-24)

*Please note that the minimum subscription for NT-Bills is N100,000.00

FGN Bond Update: Bullish Frenzy, Average Yield Plummets 8bps W-o-W to 19.41%

Similarly, The FGN bond market also witnessed a bullish sentiment, as market participants positioned themselves ahead of anticipated bond maturity inflows this week. As a result, the average FGN Bond yield declined 8bps w-o-w to settle at 19.41% from the 19.49% recorded in the previous week.

A further breakdown indicated that the short and mid-end instruments saw the most bias, as their average yields contracted 23bps and 9bps w-o-w respectively. Specifically, the MAR-2025, APR-2029 and MAY-2029 instruments declined 64bps, 66bps and 61bps respectively.

Going into the week, we expect continued demand pressure as market participants assess short-term liquidity and possible policy changes. We advise investors to take advantage of maturities with attractive offers in the secondary market particularly at the short and mid ends of the curve.

Please see below FGN bond secondary market rates:

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Rates are valid till 2:00pm today (11-Nov -24)

*Please note that the minimum subscription for FGN Bond is N20, 000,000.00

To indicate your interest and for further enquiries, kindly send an email to brokerageteam@afrinvest.com or call any of the contacts below:

Lagos: Mayowa - +234 916 841 3719

Deborah - +234 803 522 3512

Victoria - +234 810 982 6693

Margaret - +234 806 407 1983

Oladayo - +234 813 308 6063

Adebimpe - +234 913 922 0268

Justice - +234 809 731 6151

Port Harcourt:    Uduak - +234 809 023 4238

                           Mishael - +234 806 613 1311



Abuja: Bolanle - +234 802 304 5283
                            Favour - + 234 701 471 6268

Onitsha: Paul - +234 803 707 1720

Haniel - +234 814 845 9513

Kano: Moses - +234 803 589 9665

Helen - +234 813 669 6980

Thank you for choosing Afrinvest Securities Limited.

Best regards,