Investors flood one-year T-bills as subscriptions hit N2.89trn

Investors flooded into one-year Treasury bills at the March 18 auction, driving subscriptions to N2.89 trillion, more than three times its N800 billion offer.
The strong demand highlights sustained investor appetite for locking in higher yields on longer-dated instruments.

Ayodeji Ebo, managing director of Optimus by Afrinvest, said investor demand remained concentrated on the 364-day bill, as market participants continue to lock in relatively high yields for longer duration instruments.

The Central Bank of Nigeria (CBN) allotted N542.64 billion for the tenor.

Overall, the CBN offered N1.05 trillion across the 91-day, 182-day, and 364-day instruments in its final auction for the month and first quarter, with demand varying across maturities.

The 91-day bill recorded mild oversubscription, with bids of N102.19 billion against an offer of N100 billion. A total of N101.29 billion was allotted.

Demand was weakest at the mid-tenor, as the 182-day bill attracted N66.99 billion in subscriptions compared to the N150 billion on offer, with allotments coming in at N47.94 billion.

Stop rates declined slightly on longer tenors, with the 364-day bill easing by 0.09 percentage points to 16.63 percent, while its true yield stood at about 19.95 percent.

Ebo added that the decline in stop rates on longer tenors reflects improved liquidity conditions and strong institutional participation, while weaker subscription in the 182-day segment points to selective demand across the curve.

Similarly, the 182-day tenor recorded a marginal drop to 16.62 percent, with a true yield of approximately 18.14 percent, while the 91-day bill remained unchanged at 15.95 percent, with a true yield of about 16.62 percent.

Analysts at Meristem Securities said recent developments in the fixed-income market influenced investor sentiment.

“The Iran attack-induced selloffs filtered into the broader fixed income market, pushing yields slightly higher ahead of the auction,” the firm said.
They noted that system liquidity remained strong, supporting participation, even as yields in the secondary market hovered around the mid-16 percent range.

The auction comes amid expected system liquidity from maturing Treasury bills worth N579 billion during the week, including N436.71 billion in the 364-day tenor, N100.01 billion in the 91-day, and N42.28 billion in the 182-day bills. (BusinessDay)