…As Apex Bank Allots N731.37Bn
The Central Bank of Nigeria (CBN’s) Treasury Bills Primary Market Auction conducted last Wednesday, recorded total subscriptions of about N2.95 trillion, far higher than the N700 billion on offer, despite a decline in stop rates.
According to the TBs’ auction results released by the apex bank indicated that it allotted a total of N731.37 billion across the three tenors, about 4.5% higher than the planned N700 billion offer in its Q2 Issuance Calendar.
The TB auction featured the 91-day, 182-day, and 364-day instruments, with the one-year bill again attracting the bulk of investor interest.
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An analysis of the debt instruments’ performance data showed that while stop rates dipped for the medium- and long-term tenors, the short-term rate remained unchanged at the last auction.
The auction results reflected that investors’ sentiment was highly skewed toward the 364-day TB, which continued to dominate subscriptions in the debt market over the past months
Details of the auction showed that the apex bank offered a total of N700 billion across the three maturities, comprising N100 billion for the 91-day bill, N100 billion for the 182-day bill, and N500 billion for the 364-day instrument.
However, total subscriptions rose to about N2.95 trillion with the 364-day bill alone attracted approximately N2.63 trillion in bids against the N500 billion offered, with N549.50 billion allotment; the 182-day instrument recorded subscriptions of N227.94 billion, while the 91-day bill saw N96.78 billion in demand.
While allotments settled at N94.82 billion for the 91-day bill and N87.05 billion for the 182-day bill, the debt instruments’ stop rates stood at 15.95% for the 91-day bill, 16.19% for the 182-day bill, and 16.20% for the 364-day bill, respectively.
The apex bank’s data revealed a persistent investor preference for longer-tenor securities, driven by the desire to lock in relatively higher yields over an extended period, despite a fall in the stop rates on longer-dated bills.
Also, the stop rate on the 364-day Treasury Bill declined by 0.23 percentage points to 16.20%, the 182-day bill also dropped by 0.23 percentage points to 16.19%. while the 91-day bill held steady at 15.95%.
Investment experts believe that the drop in the TBs’ stop rates despite strong demand contrasts sharply with the trend in the previous auction, during which rates were upswing in trend despite huge liquidity in the financial system.
