Investors flocked to Nigeria’s one-year Treasury bills during the March 18 auction, driving total subscriptions to N2.89 trillion, more than three times the N800 billion offered, highlighting strong appetite for longer-dated instruments with relatively high yields.
The Central Bank of Nigeria (CBN) allotted N542.64 billion to the 364-day bills, which saw the highest demand, according to Ayodeji Ebo, managing director of Optimus by Afrinvest. Market participants are locking in returns on longer tenors amid stable system liquidity.
Across the full auction, the CBN offered N1.05 trillion in 91-day, 182-day, and 364-day bills, with mixed demand patterns:
- 91-day bills: Mild oversubscription with N102.19 billion in bids for N100 billion on offer; allotment stood at N101.29 billion.
- 182-day bills: Weakest demand, attracting N66.99 billion in subscriptions against an offer of N150 billion; N47.94 billion allotted.
- 364-day bills: Highest demand with stop rate easing slightly to 16.63% and a true yield of 19.95%, reflecting strong investor interest.
Ebo explained that the slight decline in stop rates for longer tenors indicates improved liquidity conditions and robust institutional participation. Meanwhile, selective demand across the curve explains weaker subscription in the 182-day segment.
Yields for other tenors remained stable: the 182-day bill recorded a yield of 16.62% (true yield ~18.14%), while the 91-day bill stayed at 15.95% (true yield ~16.62%).
Meristem Securities analysts noted that geopolitical tensions, including the recent Iran attacks, influenced fixed-income market sentiment ahead of the auction. Sell-offs in the broader market slightly pushed yields higher, but strong system liquidity supported active participation.
The auction coincides with the maturing of Treasury bills worth N579 billion during the week, including N436.71 billion in the 364-day tenor, N100.01 billion in the 91-day, and N42.28 billion in the 182-day bills, injecting liquidity into the system.
The strong subscription underscores investors’ continued preference for longer-term instruments that offer higher returns amid ongoing economic and geopolitical uncertainties, signaling confidence in government securities as a safe investment option.
