CBN to Open Treasury Bills worth N700bn for Subscription
The Central Bank of Nigeria (CBN) is scheduled to open N700 billion worth of Nigerian Treasury bills for subscription across standard tenors – 91, 182 and 364-day maturities.
The auction will be floated on Wednesday after inflation data has been released. With the expectation that the inflation rate will reduce below 18%, analysts anticipate spot rates on Treasury bills to temper.
Fixed income market analysts expect strong oversubscription for the Treasury bills amidst rising appetite for the naira assets. Demand for one-year bills is projected to spike as investors seek to park funds for a long duration.
In the fixed income market, trading activities ended with bullish sentiments following the liquidity surplus. Consequently, the average yield across all instruments contracted by 35 bps week on week to 19.3%.
By segment, Nigerian Treasury bill yields fell by 41 basis points to 17.0%, while OMO yields declined by 51 basis points to 21.7%, according to Cordros Capital Limited, reflecting heightened bargain hunting.
Ahead of the new week, the market has already begun to price in disinflation as the secondary Naira fixed income market traded with a mixed sentiment, albeit with a bullish undertone, last week.
According to AAG Capital, demand was seen across the belly of the curve. In the week, the CBN conducted an OMO auction offering mid-tenor bills across 152-day and 173-day tenors.
The 152-day bill cleared at 20.59%, with ₦640.15 billion allotted as against a total subscription of ₦645.15 billion, while the 173-day bill cleared at 20.69%, with ₦1.91 trillion allotted, below the total subscription of ₦2.45 trillion. Overall, total subscription hit ₦3.09 trillion, against ₦600 billion on offer. MTN Nigeria Plunges by 10% to N9.01trn as Sentiment Fades
