THERE are expectations that the Nigeria Treasury Bills (NTB) auction will spur demand in the market this week as investors rush for safe haven in the fixed income market.
At the Open Market Operation (OMO) auctions last week, the Central Bank of Nigeria (CBN) offered N200 billion across the three tenors and recorded a total subscription of N533.8 billion but eventually sold N350.00 billion.
These were allocated as N7 billion for 92-day, N8 billion for 176-day and N335 billion for 361-day. The stop rates attached to the tenors settled at 10 percent, 13.50 percent and 17.00 percent, respectively.
Similarly, January’s primary bond auction was oversubscribed by 68 percent at N604.56 billion against N360 billion offered by the Debt Management Office (DMO) but lower than the December subscription of N886.41 billion.
Dealers said the oversubscription was at the 2027 and 2028 tenors at N166.99 billion and N311.88 billion, while the 2029 and 2033 were undersubscribed at N56.84 billion and N68.85 billion, respectively. However, the DMO eventually sold N418.20 billion, which was 31 percent lower than the total subscription but 16 percent higher than the amount offered.
The large subscription led to a decline in stop rates across all papers to 15.00 percent, 16.00 percent, 16.50 percent and 17.15 percent from 15.50 percent, 16 percent, 16.50 percent and 17.15 percent for 2029, 2033, 2038 and 2053, respectively.
and then