UNLIKE last week, there are expectations that activity level in the money market this week will be bearish amid limited maturing Treasury and Open Market Operation (OMO) bills.
Consequently, market participants say this will be different from the Nigeria Treasury bills (NTB) Primary Market Auction (PMA) subscriptions which spiked to N1.54 trillion as stop rate rises.
Investors saw a rally at the NTB auction held on August 24, with subscriptions rising to N1.54 trillion as stop rates adjusted upward.
This subscription according to dealers, was the highest since the naira redesign period when banks had large idle funds and stopped rates settled above 14percent for 364 days, indicating investors’ responsiveness to higher coupon rates.
However, despite the oversubscription across three tenors, only N283billion was allotted of the exact amount offered. The 91-day, 182-day, and 364-day rates grew by 19basis points (bps), 210bps, and 417bps to 5.19percent, 8.00percent and 13.97percent respectively.
Dealers believed the upward adjustment might temporarily raise the government’s obligations, but this is necessary to attract investors, particularly foreign investors, and reduce negative returns.
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