Investors Step Up Treasury Bills Hunting after CBN Rejects Bids
Investors stepped up hunting for Nigerian Treasury bills in the secondary market amidst recent spot rate cuts at the Central Bank of Nigeria (CBN) primary market auction – where N1.25 trillion in excess bids were rejected.
The CBN slashed spot rates across the standard tenors -91, 182 and 364-day bills as real return on investors surged to 7.38% post disinflation.
Demand for local treasury papers increased as the authority rejected N1.25 trillion of the aggregate subscription of about N1.6 trillion at the midweek auction.
Hence, trading activities at the Treasury bills market closed on bullish tone, driven by strong demand for the Nigerian Treasury bills that will expire on 17-September, which was quoted at 16.15/15.60%.
The 3-Sep bill also attracted interest, fixed income market analysts at AIICO Capital Limited said in a note. The long segment of the curve contracted by 12bps.
This was as a result of notable demand for the newly issued 1-year bill, the 03-Sep (-73bps) instrument, as well as the 20-Aug (-58bps) paper. Average yield contracted by 6bps to settle at 18.37%.
The yield contraction was driven by the demand for the 91 day to maturity (-1bp),182 day to maturity (-1bp), and 350 day to maturity (-73bps) bills, respectively.
Moderate activity occurred on the OMO curve, particularly on the 7-Apr and 17-Feb tenors. Hence, the average yield contracted by 1bp to 22.2% in the OMO segment. GTCO Spikes to N2.128 Trn on New Shares Listing
