The Central Bank of Nigeria (CBN) has increased the amount it is offering in its latest Treasury Bills (T-bills) auction to ₦550 billion, up from ₦400 billion in the previous auction.
This new offer spans across the usual 91-day, 182-day, and 364-day tenors.
However, investor demand reduced despite the higher offer. Total subscriptions dropped by nearly 30%, settling at N1.01 trillion compared to previous figures. Interestingly, the CBN still allocated more than it offered, with total allotments reaching N598.33 billion — an increase of about 8.79%.
Investors remained particularly interested in the 364-day bills, which attracted a significant N956.88 billion in bids. This accounted for almost 88% of the total subscriptions. Meanwhile, stop rates for the 91-day and 182-day papers remained steady at 18.00% and 18.50% respectively. The 364-day tenor, however, saw a slight increase in its stop rate, rising to 19.63%.
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In the secondary market, average T-bill yields dropped by 10 basis points to 20.97% from 21.07%. This decline was largely driven by investors who couldn’t secure bids in the primary market and shifted their focus to secondary offerings. Short-term maturities witnessed minor yield drops, while longer-dated ones showed mixed performance, a reflection of caution on the part of investors.
The CBN also conducted an Open Market Operations (OMO) auction during the week, offering N500 billion across longer-term maturities of 315-day and 329-day. The auction was oversubscribed, drawing in N773.74 billion in bids, with N756.74 billion eventually sold. Stop rates here were significantly higher at 22.65% and 22.72%.
The Eurobond market also saw bullish activity, with yields generally falling except for a few maturities. Overall, the average Eurobond yield dropped by 18 basis points to 10.12%.
Analysts attribute these movements to investors adjusting their strategies in light of changing interest rates and broader economic conditions.
