The Central Bank of Nigeria (CBN) has increased its offering at the latest Treasury Bills (T-bills) auction, raising the total amount on offer to N550 billion — a notable jump from the N400 billion offered in the prior auction round. The fresh issuance covers the standard 91-day, 182-day, and 364-day tenors.
Despite the larger offer, investor enthusiasm showed signs of cooling. According to market reports, total subscriptions fell sharply by nearly 30%, sliding to N1.01 trillion. Nonetheless, the CBN allotted more than it initially planned, settling sales at N598.33 billion, representing an almost 9% increase from the previous auction.
Analysts at Meristem Securities observed that stop rates on the shorter tenors remained unchanged. The 91-day and 182-day instruments held steady at 18.00% and 18.50%, respectively. However, the 364-day bill saw a slight uptick, with its rate inching up to 19.63%.
Investor appetite was largely concentrated on the longer-dated paper, with the 364-day tenor drawing bids worth N956.88 billion—nearly 88% of the total subscription volume.
In the secondary market, T-bill yields slipped modestly, with the average yield falling by 10 basis points week-on-week to settle at 20.97%. This dip is attributed to investors who missed out at the primary auction and turned to the secondary market to secure placements.
Breaking it down further, short-term bills saw minimal yield declines, with a drop of 4 basis points. Medium to longer-dated securities experienced mixed movements: yields on the 6-month, 9-month, and 12-month maturities dropped by 3, 48, and 7 basis points, respectively. Analysts link this to cautious trading strategies and concentrated interest in the 9-month paper.
The CBN also conducted an Open Market Operations (OMO) auction during the week, offering N500 billion across 315-day and 329-day tenors. The auction drew strong participation, with total bids reaching N773.74 billion. The central bank eventually allotted N756.74 billion, with stop rates closing at 22.65% and 22.72% for the respective terms.
Meanwhile, Nigeria’s local bond market enjoyed modest gains, with yields on selected bonds such as the APR-33s, JUN-35s, and JUL-37s falling by 3 basis points. As a result, the average yield on government bonds eased slightly to 19.04% from 19.07% recorded a week earlier.
In external markets, the nation’s Eurobonds also experienced bullish activity. Demand strengthened across most maturities, pushing yields lower—except for the NOV-27 bond, which edged up by 3 basis points. Significant drops were seen in the NOV-25, MAR-29, and JUN-31 bonds, where yields fell by 43, 30, and 27 basis points, respectively. Overall, the average yield on Nigeria’s Eurobonds slipped by 18 basis points week-on-week to settle at 10.12%.
