CBN sold N756bn Treasury bills – Afrinvest

The Central Bank of Nigeria sold Treasury bills worth N756bn last week following a subscription at its primary auction.

The apex bank offered N530bn across 91-day, 182-day, and 364-day maturities, with oversubscription primarily driven by long-dated bills.

Out of the total offer, N50bn was allocated to 91-day bills, N80bn to 182-day bills, and N400bn to 364-day bills. Short- and mid-tenor instruments witnessed weaker demand, with subscription ratios of 0.5x and 0.2x, respectively. Conversely, the 364-day bill recorded a robust 6.2x subscription, attracting bids worth N2.5tn.

“The CBN allotted 0.5x, 0.2x, and 1.8x of the respective offers, resulting in total sales of N756bn worth of bills. Notably, the auction cleared at stop rates of 18 per cent and 18.5 per cent for the 91-day and 182-day instruments, respectively—unchanged from the prior auction—while the 364-day rate declined by 82 basis points to 21.8 per cent.”

Overall, the auction achieved a total subscription of 4.8x the initial offer, compared to 3.0x recorded in the previous auction.

In the secondary market, lost bids spilt over, sustaining bullish sentiment. Average yields declined further by 16 basis points week-on-week to 25.5 per cent. Long-tenor bills led the contraction, with yields falling by 25 basis points, compared to declines of 12 basis points each for short- and mid-tenor bills.

Market analysts at Afrinvest anticipate that rates will continue to moderate in the coming week, driven by robust liquidity conditions.

They added that monthly Federation Account Allocation Committee disbursements and expectations of a potential shift in monetary policy could further strengthen the bullish momentum in the Treasury bills market.

The PUNCH reported that investors have continued to show strong interest in Nigeria’s longer-dated Treasury bills. The Debt Management Office, on behalf of the Central Bank of Nigeria, offered N530bn in standard maturities to investors in the primary market. The breakdown included N50bn for 91-day bills, N80bn for 182-day bills, and N400bn for 364-day bills.