Kenya’s treasury bill yields are expected to hold steady at next week’s auction, but Nigerian yields should trend higher as the central bank continues to drain liquidity from the system.
NIGERIA
Nigeria plans to issue 137.97 billion naira ($848 million) worth of treasury bills on June 4 with maturities ranging from three months to one year, in its continued bid to rein in inflation and curb speculation on the local currency.
“Liquidity is very tight in the banking system now because of a massive mopping up exercise by the central bank this week and we expect investors to demand higher yields at the next treasury bill auction,” a trader with Guaranty Trust Bank said.
Yields could rise by as much as 40 basis points across the curve, at the auction, dealers predicted. ($1 = 162.65 naira)
KENYA
Kenya’s central bank will sell 91-day, 182-day and 364-day Treasury bills worth a total of 12 billion shillings ($136.75 million), with yields seen little changed from this week’s auction.
The weighted average yield on the 91-day Treasury bills edged down to 8.802 percent this week from 8.885 percent previously, while that for 182-day bills eased slightly to 9.888 percent from 9.927 percent.
The yield on the one-year paper was at 10.248 percent, up from 10.079 percent.
“There hasn’t been much of a move in rates and they have basically stagnated,” said Mathangani Kariuki, fixed income analyst at African Alliance.
“I don’t see much of a move rates wise. Subscription-wise I think it will be the same sort of scenario we have seen this week. Possibly slightly better subscription.”
