Culled—-Proshare

September 25, 2017/Afrinvest

Last week, investors’ interest (foreign and domestic) in T-Bills instruments was sustained both in the primary and secondary markets. As a result, average T-Bills rates declined across tenor – down 134bps M-o-M. It is noteworthy to emphasize that the demand for long dated bills spiked significantly since the CBN stopped offering instrument above 300 days at its OMO auctions.

Consequently, we have observed a bull flattening pattern (i.e. longer-term rates falling faster than shorter ones) at primary and secondary market for T-Bills as investors aggressively position in long dated bills. At the PMA last week, the 364-day stop rate fell to 17.0%, 152bps lower than the August 30^th Auction stop rate (18.52%).

Please see below today’s indicative rates and tenors:

Kindly note that rates are valid for today 25-Sep-2017

Please see the result of the PMA held last week Wednesday below:

This week, there will be maturing T-Bills worth N123.5bn. On the back of continued interest in long term instruments, we anticipate rates to moderate lower towards the end of the week while short to medium term rates remain attractive.