Investor interest in Nigerian Treasury Bills (NTBs) surged at the recent auction held on September 4, 2024, as total subscriptions soared to over N1 trillion.
The Central Bank of Nigeria (CBN) offered N233.31 billion in NTBs, but investor demand far exceeded the supply, reaching N1.13 trillion, marking a 384.17% oversubscription.
This strong demand highlights the appeal of risk-free, government-backed securities amid ongoing macroeconomic challenges.
The auction saw high interest in the 364-day bills, which received N1.07 trillion in subscriptions, the highest among all tenors. However, the CBN only allotted the original offer amount of N233.31 billion, signaling its strategic effort to control the yield curve and manage liquidity.
Although stop rates fell across all tenors compared to the previous auction, the yields remained competitive.
The 364-day bills offered a return of 23.3654%, while the 91-day and 182-day bills provided yields of 17.7675% and 19.1881%, respectively. This shows that despite the rate reductions, investors continue to find NTBs attractive.
With inflation and monetary tightening dominating the economic landscape, the strong demand for Treasury Bills underscores investors’ preference for secure investments. According to the CBN’s 2024 Issue Calendar, N2.2 trillion worth of maturing NTBs are set to be re-issued in Q4 2024, as part of the government’s liquidity management strategy.