Banks, Asset Managers Bet N2.54trn on Nigerian Treasury Bills
Investors, including banks and other asset managers, staked N2.54 trillion in bets on Nigerian Treasury bills at the primary market auction last week amidst rising appetite for naira assets.
The Debt Management Office (DMO) conducted a primary market auction on behalf of the Central Bank, where N530 billion worth of Treasury papers was offered to local investors. The auction was significantly oversubscribed amidst liquidity fluctuations that kept short-term benchmark interest rates uptight in the money market.
The Nigerian Treasury bills offers were split across standard maturities, but appetite for one-year bills eclipsed other instruments demanded. The total offer of N530 billion was split into N50.00 billion for the 91D, N80.00 billion for the 182-day, and N400.00 billion for the 364-daybills.
Investors double down their bets amidst expectation that the monetary authority will hike the benchmark interest rate at the next policy committee meeting in Feb. Subscription level settled significantly higher at N2.54 trillion as against a total of NGN1.52 trillion demand saw at the previous auction.
The subscription level translated to a bid-to-offer ratio of 4.8x, significantly higher than 3.0x recorded in the previous auction. But the debt office shied away from taking too much amidst tight liquidity conditions in the banking system.
The authority sold N756.01 billion to investors across standard maturities, traders said in their separate notes. The breakdown showed that the DMO sold N26.45 billion for the 91-day bills, N17.09 billion for the 182-day, and N712.48 billion for the 364-day papers.
The spot rate for short-dated Treasury bills remained steady at 18.00% at the auction on the back of low appetite. At the belly, the spot rate for 182-day bills was priced at 18.50%, the same rate offered in the previous auction.
For one-year Treasury bills, the spot rate declined to 21.80% at the auction from 22.62% in the previous auction conducted by the authority. #Banks, Asset Managers Bet N2.54trn on Nigerian Treasury Bills FBN Holdings Records Huge Off-Market Shares Transactions
