The Nigerian government says it attracted N3.1 trillion from its latest Treasury bill auction held on February 5, 2025. The auction, which featured three tenors 91-day, 182-day, and 364-day witnessed a strong investor appetite, particularly for the one-year instrument, which saw subscriptions surpassing N3.1 trillion.
Investors demonstrated significant enthusiasm for the one-year instrument, with subscriptions surpassing N3.1 trillion compared to the N500 billion that was made available. This trend indicates a strong preference for higher-yielding, longer-term securities in light of the prevailing market conditions.
Also, The 91-day and 182-day bills saw lower-than-offered subscription levels, with the 182-day instrument recording a significant shortfall, attracting just N19.52 billion out of the N120 billion offered.
The outcomes of this auction indicate a preference among investors for longer-term instruments in order to secure higher yields, in light of anticipated changes in monetary policy. Amid ongoing inflation concerns and stringent monetary conditions, the appetite for risk-free government securities remains strong.
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Furthermore, the stop rates reveal that the government is prepared to offer a premium to entice investors, especially for the 364-day bills.
Also, this pattern may affect future bond yields and influence overall liquidity within the fixed-income market. Institutional investors, in particular, are likely to continue prioritising Treasury Bills as a safeguard against inflation and as a relatively secure investment choice in Nigeria’s unpredictable economic environment.
The surge in investor’s appetite for government instruments comes after the highly successful October 2024 bond auction which attracted 285 billion Naira.
