By China Nwokoji
THERE are expectations that the stop rates of the 364-day T-Bills will rise slightly during auction of N161.87 billion T-bills worth by the Central Bank of Nigeria (CBN).
The auctions will be via the primary market; viz: 91-day bills worth N1.10 billion, 182-day bills worth N0.92 billion and 364-day bills worth N159.85 billion.
According to Cowry Research, “We note that traders’ sentiment will be shaped by the T-bill auction result over the course of the new week and we anticipate the 364-day T-bill rate to rise, hence we expect local OTC bond prices to decrease (and yields to increase) in the coming week.”
Meanwhile, the CBN offered treasury bills worth N224.50 billion for sale at the Primary Market Auction (PMA), but investors staked N906.21 billion on the asset class because of a growing appetite for risk-free investment tools.
A breakdown of the exercise showed that N1.03 billion worth of the three-month T-bills was taken to the market by the CBN, but investors submitted bids worth N4.35 billion during the exercise.
At the close of the auction, the Central Bank allotted N1.03 billion to traders, with the stop rate lowered by 1.56 percent to 1.44 percent from 3.00 percent.
A look at the six-month bill showed that the bank auctioned N10.55 billion at midweek but received subscriptions valued at N11.31 billion from investors and allotted N10.55 billion at 6.00 percent, 2.76 percent higher than the 3.24 percent of the preceding session.
As for the 12-month bill, N212.92 billion was offered for sale during the session but the CBN had bids valued at N890.55 billion, who were hungry for higher earnings from the debt instrument.
This significant increase in the subscription rate forced the apex bank to sell more than it initially wanted to allot.
Data showed that the Central Bank sold N312.92 billion worth of the treasury bills maturity at a higher stop rate, 10.00 percent, higher than the 9.90 percent of the previous session by 0.10 percent.
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