Nigeria’s one-year treasury bill was oversubscribed by 300 per cent during the Primary Market Auction by the Central Bank of Nigeria on Wednesday.
Results from the auction showed that the one-year T-bill was the toast of investors who offered N1.87tn for the N600bn on offer, out of which N908.75bn was allotted with stop rates of 19 per cent. Investors bid between 13 per cent and 29.9 per cent as interest rates.
The auction was aimed at rolling over maturing Nigerian Treasury Bills worth N1tn. The auction covered maturities across three different tenors: 91-day with N200bn on offer, 182-day with another N200bn and 364-day had the highest treasure bill on offer at N600bn.
At the end of the auction, the 91-day bill received N39.90bn offers all of which were sold, the 182-day bill got N76.83bn subscriptions out of which N51.35bn was allotted.
Commenting on the day’s auction, the Managing Director of the Arthur Steven Asset Management, Tunde Amolegbe, said that the performance of the one-year bills showed that investors had confidence in the current government and the reforms it had embarked on.
He said, “Firstly, the investors are seeking higher rates for funding due to CBN signalling further tightening due to accelerating inflation and other factors. Secondly, interest seems skewed towards the longer end of the curve which is an indication of confidence in the government and its reforms.
“Also, the massive over–subscription shows the significant system liquidity.”
Experts said that the auction represents a move by the apex bank to manage the country’s debt obligations and address liquidity in the financial system.
In an auction held in January, the CBN sold treasury bills totalling N381.2bn across various maturities: 91, 182, and 364 days. The interest rates for these maturities were recorded at five per cent for the 91-day bills, 7.15 per cent for the 182-day bills, and 11.54 per cent for the 364-day bills, respectively.