Nigeria to raise N70.55 billion in T.bills July 9, treasury yields likely to lower

The Central Bank of Nigeria will raise N70.55 billion ($433.97 million) by issuing 3- and 6-months treasury bills at an auction on July 9, the regulator said on Friday.
The bank said it will raise N20.15 billion in the 3-month bill and N50.40 billion in the 6-month note, using the reverse, Dutch auction system. The auction result are expected the next day.
Nigeria raised N134.5 billion ($827.18 million) in treasury bills with tenor ranging between 3-months to one year with mixed yields at its last auction on June 25. It has said it will raise N936.92 billion ($5.76 billion) from treasury bills in the coming three months.

Meanwhile, yields on Nigeria’s Treasury bills are likely to inch down at auction next week while good liquidity in Kenya’s money markets could spur demand for Treasuries.
For Africa’s largest economy, higher liquidity in the money markets will boost demand for government securities thus helping to drive down yields.
“We don’t expect rates to be far off from the previous auction,” one dealer with Stanbic IBTC said. Yields stood at 9.95 percent for the 91-day and 10.25 percent for the 182-day bills this week.
Traders said the two debt notes are currently trading around 10.30 percent for the 91-day Treasury bills and 10.20 percent for the 182-day bills in the secondary market.
KENYA
The yields on Kenya’s Treasury bills are expected to edge down or remain flat, thanks to increased liquidity in the money market, traders said.
The Central Bank of Kenya (CBK) will sell 91-day, 182-day and 364-day Treasury bills worth a total of 12 billion shillings ($136.60 million).
At this week’s auction, the weighted average yield on the 91-day bills eased to 11.408 percent from 11.438 percent last week, while that on the 182-day paper dipped to 11.500 percent from 11.585 percent.
The yield on the 364-day Treasury bills rose to 11.788 percent from 11.186 percent.
“Rates are likely to move slightly lower on the 91-day and 182-day, and the 364-day will probably remain around the same levels, or also slightly lower, due to this liquidity condition,” Pooja Shah, a senior dealer of assets and liabilities management at Kenya Commercial Bank, said.
Traders said the liquidity available in the market had led to heavy subscription, a trend that was expected to continue next week, but central bank was likely to reject any bids whose rates were too high for them.
“You see CBK didn’t accept the full amount and I think they are trying to send signals to the market that they don’t want it to go up further. So I expect it either to be rage-bound or they come down,” Patrick Mwanzia, fixed income trader at Equity Bank, said. ($1 = 162.57 Naira) ($1 = 87.8500 Kenyan Shillings)