Nigerian Treasury, OMO Bills Yields Decline after Auctions
The average yield on Nigerian Treasury bills and OMO bills declined as investors sought to fill lost bids at the primary market auctions. The Central Bank of Nigeria (CBN) was in the market to sell OMO bills to banks, and foreign portfolio investors last week.
The authority also sold Nigerian Treasury bills as part of an efforts to management liquidity level in the financial system Both auction results reflect investors’ interest in the naira assets ahead of inflation data for April in the new week.
Post-auction trading activities were positive, with interest in the new 1-year bill and OMO papers across Jan to Apr maturities. Nonetheless, trading volumes were modest. Yield retreated as market participants looked to fill unmet bids via secondary market transactions. Consequently, the average yield across instruments declined by 18 bps to 23.5%.
Across the market segments, the average yield declined by 10 bps and 18 bps to 21.0% and 26.9% at the Nigerian Treasury bills and OMO segments, respectively, Cordros Capital Limited said in an investor note.
At the midweek auction, the CBN offered bills worth N550.00 billion, split as N50.00 billion for the 91-day, N100.00 billion for the 182-day, and N400.00 billion for the 364-day to maturity bills.
Total subscription levels settled lower at N1.09 trillion as against N1.54 trillion at the previous auction, indicating a bid-to-offer ratio of 2.0x, which was lower than the previous auction’s print of 3.9x.
The auction closed with the CBN over-allotting to the tune of N598.33 billion. The CBN sold N77.22 billion for the 91 days to maturity, N38.49 billion for the 182 days, and N482.62 billion for the 364 days papers.
The auction pricing showed that the stop rate for 91 days settled at 18.00% (unchanged), 182-day treasury bills was priced at 18.50% (unchanged), and the spot rate increased by 3 basis points to 19.63%.
The CBN also conducted an OMO auction on Tuesday, offering instruments worth N500.00 billion across standard maturities. The offer for subscription was split to N250.00 billion for the 315-day maturity and N250.00 billion for the 329-day maturity.
Total subscription settled at N773.74 billion, translating to a bid-to-offer of 1.5x, with the CBN allotting N756.74 billion across the two maturities. The Apex Bank allotted N40.35 billion for the 315 days and N716.39 billion for the 329 days. Lagos, BoI to Sign MoU to Improve SMEs Access to Finance
