Weekly Update on NT-Bills [25.21% down 1bps] and FGN Bond [20.08% up 21bps]

Weekly Update on NT-Bills [25.21% down 1bps] and FGN Bond [20.08% up 21bps]
(Source: Afrinvest Securities Limited, Date: 20-Jan-2025)

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Bulls Prevails as Average Yield inches lower by 1bp W-o-W to 25.21%

The Nigerian Treasury Bills market witnessed sustained demand throughout last week, particularly in the 1-year paper. This drove marginal yield declines across maturities despite liquidity challenges (₦300.0bn short as at Tuesday, 14-Jan-25). Consequently, the average benchmark yield inched lower by 1bp w-o-w to close at 25.21%.

In more details, buying interest were witnessed on the short and mid ends as average yield contracted by 55bps and 11bps w-o-w respectively. The 6-Mar-25 bill emerged as the most traded instrument in the short end, driving the yield contraction in that segment. Conversely, the average yield in the long end increased by 38bps w-o-w, despite strong investor interest in the 8-Jan-25 bill.

Looking ahead, the Debt Management Office (DMO) is set to conduct a PMA on Wednesday, 22-Jan-25, when approximately ₦237.08bn is expected to mature. The DMO plans to offer ₦530.00bn across the 91-day, 182-day, and 364-day tenors.

Please see below our PMA expectations:

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This week, we expect the auction to set the tone for market direction as investors adjust their strategies accordingly. 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:

https://stratus.campaign-image.com/images/1282865000140711175_zc_v1_1728902272512_nt_indicative1.png

Rates are valid till 2:00pm today (20-Jan-25)

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

FGN Bond Update: Bearish Run Persist as Average Yield advanced by 21bps W-o-W to 20.08%

Conversely, the domestic FGN Bonds secondary market experienced bearish sentiments last week, as investors positioned ahead of the release of the Q1 2025 FGN Bonds calendar. Consequently, the average benchmark yield rose by 21bps w-o-w to settle at 20.08%

Furthermore, sell-offs were predominantly observed at the short and mid ends of the curve, with average yield rising by 23bps and 30bps, w-o-w respectively. However, investors' demand for long-tenor maturities remained relatively stable, indicating a cautious sentiment prevailing in the market.

Going into the week, we anticipate sustained cautious trading in the near term as market participants closely monitor macroeconomic developments and auction schedules. Hence, we advise investors to take advantage of maturities with relatively attractive offers in the secondary market particularly at the short end of the curve.

Please see below FGN bond secondary market rates:

https://stratus.campaign-image.com/images/1282865000140711175_1_1719224723910_zc-noimage.png

Rates are valid till 2:00pm today (20-Jan-25)

*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 contacts below:

Lagos: Oladayo - +234 916 568 9805

Deborah - +234 803 522 3512

Margaret - +234 806 407 1983

Justice - +234 809 731 6151

Victoria - +234 805 022 4254

Adebimpe - +2349139220268

Port Harcourt: Mishael - +234 811 989 8352

Uduak - +234 809 023 4238

Abuja: Bolanle - +234 802 304 5283

Favour - + 234 701 471 6268

Onitsha: Paul - +234 803 707 1720

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,

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Weekly Update on NT-Bills [25.21% down 1bps] and FGN Bond [20.08% up 21bps] (Source: Afrinvest Securities Limited, Date: 20-Jan-2025)

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Weekly Update on NT-Bills [25.21% down 1bps] and FGN Bond [20.08% up 21bps]
(Source: Afrinvest Securities Limited, Date: 20-Jan-2025)