CBN set for rollover of Treasury-bills worth N153.99bn as stop rates rise

There are expectations that the stop rates of issuances will rise following recent signals from the Central Bank of Nigeria (CBN) to roll over maturing Treasury-bills worth N153.99 billion via the primary market.

The T-Bills are 91-day bills worth N4.52 billion, 182-day bills worth N1.31 billion and 364-day bills worth N148.15 billion.

Last week, system liquidity closed at N277.8 billion, 52.4 percent lower than prior week’s level as liquidity remained suppressed.

Similarly, dealers said that with sustained negative interest yield on fixed income securities assets, yield popped higher midweek amidst uncertainties in the Nigerian economy. The market continues to weigh inflation and interest rate hikes into asset pricing.

Dealers expect the result of bond auctions to guide yield directions in the domestic market. For the Eurobonds space, there are expectations that the bearish sentiment will persist due to risk of sentiment from foreign investors in search of higher yields following fresh rate hike by top globally systemic central banks.

However, strong liquidity in the financial system has remained a downside to yield repricing across the fixed interest income market. Debt Management Office has been frontloading borrowing, raising N4.2 trillion in seven months as heavy liquidity continues to permit what market critics tag as financial repression.

Fixed income market analysts however think that yield will be repriced in the second half of 2023 as investors await fresh catalysts amidst unsteady economic direction and conditions.

In the secondary market on Wednesday, the Federal Government bond faced sell pressures for the seventh consecutive session, as the average yield expanded by 10 basis points to 13.23 percent.

This comes at a distance to an annual inflation rate of 22.79 percent.