The Central Bank of Nigeria recorded a sharp increase in subscriptions at the last treasury bills primary auction. The total subscriptions of N1.21 trillion exceeding the N500 billion on offer, marks a notable increase from the previous auction with N1.09 trillion subscriptions.
The bulk of investor interest centered on the 364-day instrument, which alone attracted bids of N1.05 trillion against an offer of N350 billion.
Despite the initial offer, the CBN ultimately allotted N615.81 billion, up from N579 billion in the previous round. While stop rates for the 91-day and 180-day tenors remained unchanged at 18.00% and 18.50% respectively, the 364-day stop rate eased slightly to 19.56% from 19.63%.
Analysts from Meristem Securities attribute the robust subscription figures to improved system liquidity and a heightened investor preference for longer-tenor instruments, given the attractive yields and macroeconomic stability.
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In a related development, the Debt Management Office (DMO) held an Open Market Operation (OMO) auction, offering N500 billion across 182-day and 210-day tenors. This drew a total subscription of N743.25 billion, with N804.34 billion eventually allotted. The stop rates settled at 23.77% and 23.98% for the 182-day and 210-day tenors, respectively.
Despite strong demand in the primary market, the secondary T-bills market ended on a bearish note. Average yields edged up by four basis points to 20.88%, reversing the previous week’s gains. Short-tenor yields spiked due to sell-offs in shorter maturities, while the long end saw yield declines.
Meanwhile, Nigeria’s local bond market traded positively with yields dropping slightly due to renewed buying interest in specific maturities. The Eurobond segment also retained its bullish momentum, with yields dipping to 9.76%, supported by improving investor sentiment and easing global risks.
Analysts view the mixed market signals as evidence of ongoing investor repositioning in response to macroeconomic uncertainties, but confidence remains strong due to high yields and improving liquidity conditions.
