Investors Flock to Nigeria’s Treasury Bills Market Amid Unmet Bids in N44.23 Billion Auction


Investors in Nigeria’s fixed income market are turning to treasury bills following unmet bids from the recent N44.23 billion treasury auction. Kenneth Onnoha, a team member at UBA, provides an update on market trends.

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Liquidity Levels and Market Activity:

  • The week started with N212 billion in debit, impacted by Democracy Day celebrations and NNPC withdrawals of N177 billion.
  • Tuesday saw system liquidity improve to N261 billion in debit, aided by special intervention refunds and CRR activities.
  • Overnight rates increased to 31.6%, and OBV rates rose to 3.64%.

Treasury Bills and Fixed Income:

  • The NTP auction scheduled for June 12 was moved to June 13, offering N44.4 billion. Subscriptions hit N47 billion, with N55 billion sold.
  • Stop rates dropped by 20 basis points across major maturities, closing at 16.3% and 17.44%.

Secondary Market:

  • Interest in the newly issued NTB one-year bills remained high, but trading was limited due to the small issuance size.

Central Bank and Inflation:

  • Despite CBN’s inflation-targeting policy, rates across securities have dropped. The DMO aims to keep debt costs manageable.

FX Market:

  • The FX market saw lower turnover, dropping to $96 million, the lowest since June. Rates dropped by N2.42 to close at N147.62/$1.
  • System liquidity remains negative, but the approval of a $2.25 billion World Bank loan for Nigeria’s AMO and reset projects is expected to boost FX activity.

Outlook for Next Week:

  • Increased system liquidity is anticipated due to recent FGN payments and signature bonuses.
  • Upcoming coupon payments and bond maturities are expected to drive money market activity.
  • The key event to watch is the bond auction moved to June 24 from its original date.

Kenneth Onnoha, team member at UBA, shared these insights, highlighting key trends and expectations in Nigeria’s fixed income market.

Godwin Okafor, The Naija247news
Godwin Okafor, The Naija247news
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.

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