Weekly Update on NT-Bills [23.05% down 76bps] and FGN Bond [19.02% up 5bps]

Weekly Update on NT-Bills [23.05% down 76bps] and FGN Bond [19.02% up 5bps]
(Source: Afrinvest Securities Limited, Date: 03-Dec-2024)

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The Bears Prevail, as Average Yield Surged 76bps w-o-w to 23.05%

The NT-Bills secondary market traded with mixed sentiments last week, as tight system liquidity (negative at ₦438.02bn as of Wednesday 27-Nov-24) continued to pressure demand. Early bullish activity was offset midweek by a bearish tone, with rising yields reflecting cautious sentiment among investors. By the end of the week, the average benchmark yield climbed 76bps w-o-w, settling at 23.05%.

In detail, sell-offs were predominantly witnessed at the short and long end of the curve. Notably, maturities such as the 5-Dec-2024 and 9-Oct-2025 saw significant yield expansions of 223bps and 263bps, respectively. Conversely, the mid-end of the curve closed relatively flat for the week, with mild demand recorded in select mid-tenor instruments.

This week, the Debt Management Office ("DMO") is set to conduct a Primary Market Auction (PMA) on Wednesday, offering ₦583.25bn across the 91-, 182-, and 364-day tenors.

Please see below our PMA expectations:

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This week, we expect a cautious start to the week as market participants position ahead of the auction. Thus, we advise investors to position in relatively attractive bills across the yield curve, while also remaining alert for possible corporate offerings.

Please see indicative secondary market NT-Bills rates below:

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Rates are valid till 2:00pm today (03-Dec-24)

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

FGN Bond Market: Average Yield Increases By 5bps w-o-w to 19.02%

The FGN Bonds secondary market experienced a bearish trend last week, as cautious sentiment prevailed ahead of the Central Bank of Nigeria's (CBN) 298th Monetary Policy Committee (MPC) meeting. Following the announcement of a 25bps hike in the Monetary Policy Rate (MPR) from 27.25% to 27.50%, market participants adjusted their positions, resulting in yield increases across the board. By week's end, the average benchmark yield edged up by 5bps w-o-w, closing at 19.02%.

Furthermore, there was notable selling pressure observed at the mid and long end of the curve, as average yields advanced by 18bps and 17bps w-o-w to close at 21.87% and 20.88%, respectively. This was particularly evident in the FGN Feb-2034 and May-2033 maturities, with yields expanding by 83bps and 53bps w-o-w, respectively

Going into the week, we expect sustained tepid sentiments as investors continue to hunt for opportunities across the curve. Investors are advised to cherry-pick attractive yields, especially at the medium and long end of the curve.

Please see below FGN bond secondary market rates:

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Rates are valid till 2:00pm today (03-Dec -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

Margaret - +234 806 407 1983

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Justice - +234 809 731 6151

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Uduak - +2348037134442



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Haniel - +234 814 845 9513

Imuetinyan - +2348142266258

Kano: Moses - +234 803 589 9665

Helen - +234 813 669 6980

Thank you for choosing Afrinvest Securities Limited.

Best regards,