The Central Bank of Nigeria raised its total Treasury Bills Primary Market Auction offer to N550bn, up from N400bn in the previous auction. The offer covers the 91-day, 182-day, and 364-day tenors.
Despite the increase, investor demand weakened, with total subscriptions dropping by 29.45 per cent to N1.01tn. However, total allotments at the auction exceeded the offer, settling at N598.33bn, an 8.79 per cent rise compared to the previous week.
According to analysts at Meristem, stop rates held steady for the 91-day and 182-day instruments at 18.00 per cent and 18.50 per cent respectively, while the 364-day tenor saw a marginal uptick to 19.63 per cent.
“At this week’s T-Bills Primary Market Auction, the CBN raised its total offer to NGN550bn, up from NGN400bn in the previous auction, across the 91-day, 182-day, and 364-day tenors.
“Although investor demand softened, with total subscriptions dropping by 29.45 per cent to Ngn1.01trn, allotments exceeded the offered amount, settling at NGN598.33bn—an 8.79 per cent increase,” the Meristem report partly read.
Investor interest remained skewed towards the 364-day instrument, which attracted N956.88bn in bids, accounting for 87.99 per cent of total subscriptions.
As noted by Meristem, the average yield on Treasury bills in the secondary market declined by 10 basis points week-on-week to 20.97 per cent from 21.07 per cent, as investors who were unsuccessful at the primary market turned to the secondary market for placements.
On a tenor-by-tenor basis, short-dated maturities saw marginal drops in yields, with a 4 basis point decline. Meanwhile, mid- to long-dated bills experienced mixed movements: yields on the 6-month, 9-month, and 12-month papers dropped by 3 basis points, 48 basis points, and 7 basis points, respectively, reflecting cautious positioning by investors and heightened activity around the 9-month instrument.
In addition, Meristem reported that the CBN conducted an Open Market Operations auction during the week, offering N500.00bn across the 315-day and 329-day tenors.
The auction was well subscribed, attracting N773.74bn in total bids. The CBN sold N756.74bn, with stop rates settling at 22.65 per cent and 22.72 per cent for the respective tenors.
The local bond market opened on a positive note, as yields on select papers such as APR-33s, JUN-35s, and JUL-37s declined by 3 basis points. As a result, average bond yields closed slightly lower at 19.04 per cent from 19.07 per cent in the previous week.
Meanwhile, Meristem highlighted that the Eurobond market turned bullish during the week, with buying interest dominating across nearly all maturities—except for the NOV-27 paper, which saw a slight increase in yield by 3 basis points.
Notable declines were recorded in the NOV-25, MAR-29, and JUN-31 instruments, where yields dropped by 43 basis points, 30 basis points, and 27 basis points, respectively.
Consequently, the average Eurobond yield declined by 18 basis points week-on-week to 10.12 per cent, from 10.30 per cent in the previous week.
Meristem analysts attributed the developments across the fixed income markets to investors’ strategic positioning in response to the evolving yield environment and broader macroeconomic indicators.
