Investors shun 182-day T-Bills, flock to 364-day bills with N677 billion subscriptions 

The latest Nigerian Treasury Bill auction on June 5th, 2024 revealed a strong preference for longer-term investments. Investors heavily subscribed to the 364-day bills, with total offers exceeding N677 billion, compared to the government’s offer of N179.89 billion. This resulted in an allotment of N246.54 billion at a stop rate of 20.67%.

The high demand reflects expectations of stable or rising interest rates, prompting investors to lock in higher yields for a longer period.In contrast, the 182-day bills witnessed lukewarm interest. Despite a government offer of N26.82 billion, subscriptions only reached N15.02 billion. The final allotment was N12.27 billion at a stop rate of 17.5%. This suggests investors are cautious about locking their funds for shorter durations with lower returns compared to the 364-day option.

The 91-day bills, however, saw moderate activity. The government offered N14.42 billion and received subscriptions of N21.44 billion, with an allotment of N19.61 billion at a stop rate of 16.5%. This indicates a segment of investors prioritizing liquidity and shorter investment horizons.

Overall, the auction highlights a shift in investor preferences towards maximizing returns in a potentially rising interest rate environment. While longer-term bills offer higher yields, some investors still value the liquidity of shorter-term instruments.