Investors Dump Nigerian Treasury Bills after Rates Cut
Investors sell Nigerian Treasury bills after the Central bank of Nigeria (CBN) slashed spot rates at the primary market auction. With inflation slowing down, real return on investment has strengthened.
The Apex Bank maintained spot rates reduction after initial juicy offered made to investors in the past auction amidst changing market dynamics.
The treasury bills traded on bearish note last week following profit-taking activities on short- and long-dated bills. Thus, the average yield across all instruments expanded as selloff caused asset price reduction.
Across the market segments, Cordros Capital Limited said the average yield expanded by 62bps to 20.3% at Treasury bills segment and increased by 92bps to 23.6% at the OMO segment.
On behalf of the CBN, Debt Management Office (DMO) offered Nigerian treasury bills worth N161.88 billion to investors for subscription in the secondary market.
The DMO total offer across standard maturities was split into N6.78 billion for the 91-day, N4.92 billion for the 182-day and N150.18 billion for the 364-day bills.
According to auction results, the subscription level settled lower at N563.17 billion, which was a significant reduction when compared to N1.13 trillion bet on T-bill in the previous auction.
The auction closed with the DMO allotting instruments worth N161.88 billion to investors who stake huge bets on naira asset across standard maturities.
The breakdown showed that N10.84 billion was allotted to investors for the 91-day bills. Also, the authority sold N2.52 billion worth of 182-day bills, and N148.52 billion for the 364-day papers.
According to auction results, stop rates on 91-day bills slumped to 16.63% from 17.00%. Spot rate for 182-day bills was slashed to 17.00% from 18.94% while rate for 364-day bills was reduced to 18.59% from 18.94%.
Analysts said they expect ample liquidity in the system to spur demand for instruments, leading to a decline in yields in the secondary market. #Investors Dump Nigerian Treasury Bills after Rates Cut
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