364-Day T-Bills Spot Rate Tumbles on Robust Subscriptions
Spot rate on 356-day Treasury bills tumbles to 7.35 per cent at the Central Bank of Nigeria (CBN) primary market auction today due to robust subscription level by investors in the long tenor instrument.
At the primary market auction, the apex bank offered N51.50 billion for sale with a total subscription printed at N398.37 billion following rollover of matured bills. Analysts at Meristem Securities had predicted that subscription level would determine the spot rates on Treasury bills instruments at the auction.
Most analysts agreed that liquidity level in the financial system would dictate the direction of rates on Treasury instruments amidst a slowdown in yields repricing in the fixed income space.
Despite the robust subscription level, the apex bank keeps a low profile in its allocations. Specifically, the CBN allotted N4.80 billion for the 91-day at a spot rate of 2.5 per cent, the same rate offered at the last auction.
Also, for the mid-tenor bills, a total sum of N3.75 billion was allotted for the 182-day at 3.5 per cent, the same as the rate offered at the last auction.
Meanwhile, the bid-offered ratio favoured the apex bank at the long end, allotted a total sum of N147.78 billion for the 364-day bills at 7.35 per cent as against 8.20 per cent in the previous auction.
Elsewhere, the average yield at the open market operations (OMO) segment expanded by 2 basis points to 7.7 per cent amidst a slowdown in liquidity in the financial system.
This ran against the interbank rates in the money market as the overnight lending rate expanded 400 basis points to 17.5 per cent, according to Cordros Capital analysts, in the absence of any significant inflows in the system.
Analysts see trading in the Nigerian Treasury bill secondary market mixed, but with bullish bias, as the average yield pared by 2 basis points to 5.5 per cent.
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Across the benchmark curve, Cordros Capital said the average yield was flat at the short end but contracted at the mid (-6bps) and long (-2bps) segments due to demand for the 106 day to maturity (-8bps) and 211 day to maturity (-4bps) bills, respectively.
Also, the Treasury bond secondary market was also bullish, as the average yield contracted by 15 basis points to 11.7 per cent.
Across the benchmark curve, the average yield tapered at the short (-17bps), mid (-18bps) and long (-10bps) segments due to demand for the JAN-2026 (-27bps), FEB-2028 (-30bps) and JUL-2045 (-40bps) bonds, respectively.
364-Day T-Bills Spot Rate Tumbles on Robust Subscriptions
