Investors Stake N1.45trn on OMO Bills at 24.28% Interest Rate
Local deposit money banks (DMBs) and foreign portfolio investors (FPIs), along with other authorized dealers, placed a huge stake totaling approximately N1.45 trillion on Nigeria’s OMO bills during the Central Bank of Nigeria’s (CBN) primary market auction on Tuesday.
Due to elevated yields in Nigeria’s fixed income market, the auction was well received and oversubscribed significantly. At the primary market, the CBN offered N300 billion across standard maturities following a recent surge in liquidity levels in the banking system.
Past auction records revealed that alpha seekers and wealth managers in the debt market have shown preference for long dated debt instruments amidst Nigeria’s inflation rate surge and constantly changing market dynamics.
Reflecting the market mood, investors demand was focused on the long end, with subscriptions totalling N1.45 trillion, which translated to a bid-to-offer ratio of 4.83x, according to CardinalStone Limited.
The apex bank ended up selling about N1.447 trillion at a stop rate of 24.28%, AIICO Capital Limited told investors in a note. Notably, all the volume was allocated to the long-end tenor with no subscriptions or allotments for the short and medium tenors.
On Wednesday, the market expects the Apex Bank to conduct a Nigerian Treasury bills auction worth ₦513.43 billion across standard maturities. #Investors Stake N1.45trn on OMO Bills at 24.28% Interest Rate Naira Falls to N1,486 as FX Crisis Deepens
