Indications that investor appetite for high-yielding investments have again been reflected in the Federal Government Treasury Bills (T-Bills) auction conducted on February 5 with the subscriptions for the three tenors bills surpassing N3.1 trillion.
The results of the auction conducted by the Central Bank of Nigeria (CBN) for the 91-day, 182-day, and 365-day T-Bills showed that the Offer for the 91-day T-Bills totalled N50 billion, with a subscription of N42.37 billion, and allotment of N31.94 billion, while the 182-day Offer of N120 billion had a low subscription of N19.52 billion with a total allotment of N18.69 billion.
For the 365-day tenor T-Bills, the Offer totalled N500 billion with a subscription of N3.16 trillion and allotment of N619.36 billion, according to the results announced by the apex bank.
Overall, the total subscriptions for the three-tenor T-Bills stood at N3,218,032,117,000 while the total allotment was N670,000,000,000 at the end of the exercise.
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The results of the T-Bills auction indicated that investor appetite for long-term, high yielding debt instruments remained surging when analyzed within the context of the N500 billion offered and the N3.1 trillion subscriptions, while the 91-day and 182-day tenor T-Bills were less attractive to investing public.
Analysts believe that the investor appetite for the higher-yielding, long-tenor offered debt instruments is not unconnected to the stop rates. For instance, while the 91-day offer’s stop rate settled at 18%, the 182-day and 364-day tenor Bills settled at 18.5% and 20% respectively.
In addition, the results suggested that investors really competed for long-tenor T-Bills to explore the opportunity availed by the auction for their funds based on the rising inflation rate and inclement macroeconomic factors in the broad economy and expectations of future monetary policy adjustments by the CBN
