Investment: CBN to Open N290bn Treasury Bills for Subscription
Amidst inflation data expectations, the Central Bank of Nigeria (CBN) is scheduled to open N290 billion worth of Nigerian Treasury bills (NTB) for investors’ subscription next week, its auction circular revealed.
The primary market auction is expected to be led by the Debt Management Office (DMO) on behalf of the monetary authority; offers include Nigerian Treasury bills that will mature in 91, 182, and 364 days.
The treasury bills market was left high and dry in the just concluded week with zero CBN action despite a robust liquidity level in the financial system.
A number of deposit money banks sterilsed excess funds via the CBN standing deposit facility (SDF) window in the absence of significant funding pressures in the financial system during the week.
The market reported huge matured OMO bills inflows but no commensurate liquidity mop-up action, and this kept money market rates movements in check.
The CBN will sell treasury bills to investors next week, on Wednesday, and analysts anticipate rates adjustments with consensus on magnitude. However, fixed income securities agree that demand will remain strong as reflecting in investors’ positioning in naira assets amidst disinflation
The National Bureau of Statistics (NBS) will release inflation data from August before the primary market auction, and to a larger extent, the consumer price index figure is noted to influence spot rates pricing.
Nigeria’s headline inflation rate is anticipated recede in reaction to the recently rebased consumer price index and the fact that the naira has continued to trade strong against the US dollar in the currency market.
MarketForces Africa reported that the economy has seen a significant decline in price pressure, and the inflation figure is expected to capture the recent decline in fuel prices.
In the secondary market, Nigerian Treasury bills traded with bullish sentiments, driven by strong interbank liquidity. OMO yields contracted by 71 bps to 24.8%, offsetting a 22 bps increase in Treasury yields to 18.8%.
Analysts said they attribute the decline in OMO yields to the absence of OMO issuance by the CBN, which has led to increased demand in the secondary market. #Investment: CBN to Open N290bn Treasury Bills for Subscription Nigerian Exchange Index Surges as Banks Drive Intraday Rally
