Demand reaches N2.05tn at NTB auction and N5.74tn at latest OMO sale, reflecting sustained appetite for high-yielding short-term government securities.
The Nigerian Treasury bills secondary market maintained a bullish performance during the week, as increased investor demand pushed average yields lower across both Nigerian Treasury Bills (NTBs) and Open Market Operations instruments.
Average yields across all Treasury bills instruments declined by two basis points week-on-week to 18.2 per cent, supported by strong demand from investors seeking opportunities in short-term fixed-income securities.
In the NTB secondary market, average yields contracted by two basis points to 17.9 per cent, as unmet demand from the primary market auction conducted by the Debt Management Office (DMO) filtered into secondary market trading.
Similarly, average yields in the OMO secondary market declined by six basis points to 18.6 per cent, reflecting additional demand from investors whose bids were not fully satisfied at the Central Bank of Nigeria’s auction.
At the NTB primary market auction held on Wednesday, November 4, the DMO offered N800 billion across the three standard tenors, attracting total subscriptions of N2.05 trillion.
However, the debt office allotted N509.40 billion, significantly below the amount offered, while maintaining stop rates at 15.40 per cent for the 91-day instrument, 15.79 per cent for the 182-day instrument and 15.80 per cent for the 364-day bill.
The strong subscription level indicated sustained investor appetite for government securities, although the relatively modest allotment suggested that the DMO remained selective in its borrowing at the prevailing rates.
The CBN also conducted an OMO auction on Tuesday, November 3, offering N1.50 trillion in bills.
The auction attracted subscriptions of N3.52 trillion, with the apex bank eventually allotting N2.95 trillion. Stop rates settled at 17.77 per cent, 17.71 per cent and 17.67 per cent for the 119-day, 126-day and 133-day instruments, respectively.
Demand remained strong at another OMO auction conducted on Friday, November 6, as investors submitted bids worth N5.74 trillion against an offer of N1.50 trillion.
The CBN ultimately allotted N2.72 trillion, with stop rates settling at 17.25 per cent for the 179-day bill, 16.54 per cent for the 270-day instrument and 15.74 per cent for the 361-day bill.
The latest auction results highlight continued investor interest in short-term government securities, supported by attractive yields and the availability of liquidity within the financial system.
Looking ahead, the Treasury bills secondary market is expected to retain a broadly bullish bias, supported by resilient domestic demand and relatively ample system liquidity.
