Investors poured N2.34 trillion in bids at the latest Nigerian Treasury Bills (NTB) auction, more than double the N1.05 trillion initially offered by the Debt Management Office (DMO). The strong participation underscores sustained investor appetite for government securities, even as the Central Bank of Nigeria (CBN) signals potential monetary easing.
The auction recorded a bid-to-offer ratio of 2.2 times, reflecting heightened demand across all tenors, particularly as market participants sought to secure relatively attractive yields. The DMO ultimately allotted N1.01 trillion across the 91-day, 182-day, and 364-day bills, translating to a bid-to-cover ratio of 2.3 times.
Demand was especially strong at the longer end of the yield curve, with the 364-day bill seeing notable interest. The stop rate for the 91-day tenor rose by 15 basis points to 15.95 percent, while the 364-day tenor jumped 83 basis points to 16.73 percent. The 182-day bill remained stable at 16.65 percent, highlighting investors’ preference for locking in higher returns over longer durations.
Market analysts attribute the strong subscription to a balance between the CBN’s dovish policy stance and investors’ desire for adequate compensation on longer-dated naira assets. Meristem Securities noted that yields at the longer end of the NTB curve may continue to rise as authorities aim to sustain investor participation, especially while one-year bills trade around 16 percent in the secondary market.
The surge in bids also reflects ample liquidity in Nigeria’s financial system, with banks and asset managers positioning ahead of potential yield shifts. For the government, the robust demand reassures that domestic investors remain willing to fund fiscal needs via local debt markets. Analysts predict continued strong participation in upcoming NTB auctions as investors seek to lock in yields before any meaningful decline occurs in line with evolving monetary policy.
source: The sun