Bears goes into hiding 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 ₦237.5 billion 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%.