Investors Want to Buy Treasury Bills With N1.497 Trn
Investors seek to park huge amounts in Nigerian Treasury bills after rates spiked at the previous auction. However, the apex bank played ostrich by offering a much lower amount for sale to investors who showed interest in the local borrowing instrument today.
Large unsuccessful bids filtered through the secondary market, causing the yield decline. At the primary market auction conducted, the Central Bank of Nigeria offered to sell N161 billion across the standard maturities: 91-day, 182-day and 364-day.
Unlike past auctions, both allotment and spot rates were adjusted downward. Demand remained strong, with a N1.497 trillion bid and N161 billion allotment. Stop rates declined across maturities, details from the auction results revealed.
Traders said 91-day bills saw their spot rate drop by 100bps to 16.24 per cent. At the belly of the curve, 182-day bills were priced downward by 100bps. One year Treasury bills instrument saw a 37 basis points decline in spot rate to 21.12%.
In the primary market, the CBN conducted two rounds of T-bills auctions with a combined offer of ₦1.3 trillion across the 91, 182, and 364-day instruments last month.
Investors’ appetite was fairly strong with the overall bid-to-offer ratio of 3.3x, albeit weaker than January’s 38.7x, according to Afrinvest Limited.
The 364-day instrument recorded the strongest buy interest with a bid-to-offer ratio of 4.3x. The 91-day instrument saw a bid-to-offer ratio of 1.9x, while the 182-day instrument was the least competitive with a bid-to-offer ratio of 0.9x. Overall, stop rates on the 91, 182, and 364-day instruments rose 12%, 10.4%, and 7.5% respectively to 17.0%, 17.5% and 19.0%. #Investors Want to Buy Treasury Bills With N1.497 Trn
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