Treasury bills Yield Drops as CBN Rejects N1.07trn Subscription
The average yield on Nigerian Treasury bills eased in the secondary market after the Central Bank (CBN) rejected excess subscriptions totaling N1.071 trillion at the main auction last week.
Investors with lost bids at the primary market auction heated up trading activities in the secondary market. The increased hunting for Treasury paper dragged yield backward. The average yield declined by 13 basis points (bps) to 20.5% in the Nigerian Treasury bills segment as market participants filled unmet bids, Cordros Capital Limited said in a note.
At the auction, the CBN offered bills worth N162.02 billion—N22.02 billion for the 91D, N40.00 billion for the 182 days to maturity,, and N100.00 billion for the 364 days to maturity bills.
Total subscription levels settled at N1.23 trillion, which was below N1.31 trillion stake put on the previous auction. The auction results translated to a bid-to-offer ratio of 7.6x compared with 2.9x in the previous auction.
The auction closed with the CBN allotting exactly the total amount offered. A total of N37.98 billion was allotted for the Treasury bills maturing in 91 days. A total of N40.54 billion was allotted to investors that subscribed for the treasury bills paper maturing in 182 day and N83.50 billion for the 364D papers.
MarketForces Africa reported that the stop rate for 91-day settled at 17.80%, down by 18 bps from 17.98%. The spot rate for 182 days bills clicked at 18.35%, down from 18.50%. Nigeria’s one-year Treasury bill was priced at 18.84%, lower than 19.35%.
The CBN also conducted an OMO auction last week, offering instruments worth N600.00 billion—N300.00 billion for the 155D and N300.00 billion for the 204D.
The auction was met with strong demand, with total subscription settling at N1.15 billion (bid-to-offer: 1.9x), with the CBN allotting a total of N1.07 trillion across the two tenors at respective stop rates of 24.20% and 24.59%.
In the secondary market, yield on OMO bills rose by 75 bps to 26.7% as investors sold off bills to participate at the OMO auction. #Treasury bills Yield Drops as CBN Rejects N1.07trn Subscription CBN Extends Recapitalisation of BDCs to December
