CBN to Open N850bn Treasury Bills for Subscription
The Central Bank of Nigeria (CBN) is set to conduct its second Treasury Bills auction for the month on Wednesday, with a total offer of N850 billion in the bucket for subscription.
The total offer, which includes N100 billion worth of 91-day Treasury bills, N150 billion for 182-day bills and N600 billion offer for 364-day bills, will be offered for subscription midweek.
Subscription is projected to remain strong as investors continue to chase elevated yields on the naira curve amidst sustained disinflation and rate-cutting expectations.
At the previous auction, investor appetite remained relatively strong, supported by strong excess liquidity in the financial system. Total subscriptions settled at N2.344 trillion, relatively weaker than the previous record.
As expected, demand was largely concentrated at the long end of the curve, with the 364-day bill attracting N2.126 trillion in subscriptions – more than 95% of total bids.
Analysts said the pattern affirmed investors’ sustained preference for locking in longer-dated yields.
Stop rates on the 91-day and 364-day bills jumped by 15 bps and 83 bps, respectively, to 15.95% and 16.73%, from 15.80% and 15.90%. Meanwhile, the spot rate for 182-day bills remained unchanged at 16.65%.
Investors want more along the yield curve, as evidenced by recent bids at the OMO auction, where the deep pockets play. “We would expect the same at tomorrow’s auction, given limited speculation during this volatile period”, AAG Capital Limited said. Nigerian Exchange Shrinks as Investors Lose N725bn
