CBN to auction N109.7bn Treasury bills today
Motolani Oseni
Following the public holiday on Wednesday for Workers’ day celebration, the Central Bank of Nigeria (CBN) has scheduled to hold a primary market auction today, offering N109.7 billion worth of Treasury bills.
The N109.7bn maturing T-bills will be rolled over across the 91-day (N28.0bn), 182-day (N43.5bn) and 364-day (N38.2bn) tenors.
The CBN resumed its customary Open Market Operation auctions on Tuesday last week, offering a total of N200bn across the 93-day, 184-day and 359- day tenors.
While the short- and medium-term instruments were undersubscribed with a bid to cover ratio of 0.2x and 0.03x, respectively, the 359-day instrument had an oversubscription of 2.8x, signalling continued investors preference for long-term instruments.
Last week, the Treasury bills secondary market sustained its bullish run for the fourth consecutive week as improved system liquidity fuelled buying interests by investors.
The upbeat in system liquidity stemmed from matured OMO bills on Thursday (N46.3bn). Consequently, system liquidity closed at about N464.7bn on Friday due to the absence of OMO auction.
As a result, the average yields across tenors dipped by 10 basis points week-on-week to settle at 13.1 per cent on Friday.
The short-term maturities declined the most by 36bps while the medium- and long-term instruments respectively shed 24bps and nine basis points week-on-week. However, major buying interests were recorded on the 30-May-19 (-94bps), 1-Aug-19 (-69ps) and 19-Dec-19 (-45bps) maturities.
Analysts at Afrinvest Securities Limited said they expected more frequent OMO mop-ups by the CBN to persist this week as T-bills (N109.7bn) and OMO maturities (N73.3bn) worth N172.5bn
as well as Federation Accounts Allocation Committee inflows of about N350billion were scheduled to hit the system, thereby bolstering system liquidity.
“Investors are, therefore, advised taking advantage of bills with attractive yields, especially at the longer end of the curve”, they added.
