Stop rates to marginally rise despite N105bn net inflow

There are expectations in the money market that stop rates will marginally rise amid the bias of the Central Bank of Nigeria (CBN) for a contractionary policy.

The above expectation is despite Treasury-bills worth N298.04 billion which would mature via the primary and secondary markets that would exceed T-bills worth N193.04 billion which would be auctioned via the primary market leading to a net inflow of N105 billion.

The primary market auctions are through 91-day bills worth N21.15 billion, 182-day bills worth N32.83 billion and 364-day bills worth N139.06 billion.

Meanwhile, investors in the financial market are now flocking to government bonds as value of subscription to the FGN Savings Bond rise by 68.7 per cent in the third quarter 2022 (Q3’22).

Data from the  Debt Management Office (DMO) puts the value of investment in the government bond at N12.41 billion in Q3’21 as against N7.35 billion recorded in the corresponding period of 2021 (Q3’21).

The data also shows that the number of subscribers to the Savings Bond increased by 261 per cent to 7507 in Q3’22 from 2079 in Q3’21.

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Analysts and investment experts have attributed the positive turn of fortune to high interest rate necessitated by continuous increase in the Central Bank of Nigeria (CBN) Monetary Policy Rate (MPR), which has reached a record 15.5 per cent in the Q3’22.

Allotment results of the Bond’s value in Q1’22 grew 21.1 per cent to N3.33 billion against N2.75 billion in Q2’21.