There are expectations that rollover of N261.53 billion worth of maturing Treasury-bills will lead the stop rates of the issuances to decline amid demand pressure.
Looking ahead to the new week, the apex bank will roll over maturing T-bills worth N261.53 billion via the primary market, viz: 91-day bills worth N1.74 billion, 182-day bills worth N1.26 billion and 364-day bills worth N258.53 billion.
Meanwhile, market robust liquidity vanished last week following the bond auction settlement, pushing interbank rates upward.
The Open Repo Rate (OPR) and Overnight Rate jumped by 1791 basis points (bps) and 1191bps week-on-week to 21.00 percent and 20.40 percent.
Dealers said the excess money in circulation has continued to support the fixed-income market, strengthening demand at the primary auction.
The July bond Primary Market Auction (PMA) held on Monday, July 18, 2023, had a total subscription of N945.14 billion, the highest after N992.10 billion recorded in February 2023, which was bolstered by the naira redesign policy.
Contrary to analysts’ expectation of a higher-stop rate as investors bid for higher coupons to offset expected higher inflation, the oversubscription pulled down the stop rates across all tenors.
Notwithstanding the excess subscription, the Debt Management Office (DMO) settled only for N656.74 billion, 82 percent higher than the N360 billion offered.
Investors’ preference for longer-dated instruments persisted, with the 2053 tenor recording the highest allotment of N417.77 billion, followed by the 2038 tenor at N146.59 billion, while the 2033 and 2029 had below the N90 billion offer at N39.96 billion and N52.62 billion, respectively.
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