Despite Rates Decline, Treasury Bills  Still Attractive

Although yields at the Treasury bills space have been on the decline since the start of the year, they have remained attractive for risk averse investors, analysts at Meristem Wealth Management have said.

They said on Tuesday investors had continued to favour longer tenor instruments. Subsequently, the last primary market auction recorded respective bid to cover ratios of 1.03, 1.01 and 1.38 on the 91-day, 182-day and 364-day instruments.

The Central Bank of Nigeria is scheduled to hold a T-bills Primary Market Auction today. T-bills worth N259.97bn will mature, while an equal amount is expected to be issued in the 91-day, 182-day and 364-day instruments. The CBN is expected to auction N7.89bn, N30.00bn and N222.08bn in the 91-day, 182-day, and 364-day instruments, respectively.

The analysts said, “The T-bills market has been awash with mixed sentiments since the last primary market auction on February 14, 2018. However, bearish sentiment prevailed as the average yield advanced just marginally, by 0.04 per cent.

“Buying pressure persisted on the one-month, nine-month and 12-month tenors as they recorded respective yield declines of 1.10 per cent, 0.26 per cent and 0.31 per cent. The three-month and six-month tenors however were less favoured by investors as the yield on these instruments advanced by 1.67 per cent and 0.21 per cent, respectively.”