Yields on Treasury Bills decline further as demand for debt surges
By Samuel Bankole
Yields declined across all tenors at the Treasury Bills auction on Wednesday as the Central Bank of Nigeria (CBN) sold only 20.20 percent of the total of N618.08 billion demanded by investors.
The 1-year paper fetched 2.0 percent compared with 2.80 percent it was sold at the previous auction as yields on fixed-income assets decline further across the board.
Also, both the 3-month paper and 6-month debt were sold at 1.0 percent each at the auction, down from 1.08 percent and 1.49 percent respectively at the previous auction.
Investors demanded a total of N618.08 billion worth of the bill, but the regulatory bank sold only N124.88 billion worth of the debt note, representing 20.20 percent of the total demand.
The bank sold N107.62 billion in the 1-year Treasury bills compared with N540.32 billion demanded by investors, sold N4.50 billion of the 6-month paper against N44.73 billion demanded and N12.76 billion of the 3-month debt compared with N33.03 billion subscription.
Dealers attributed the increasing demand at the auction to the high level of liquidity in the money market and the fact that many investors are still risk aversed despite the low yields on fixed income.
They said many investors are still wary of investing their surplus cash in the equity market, which seems to be the main option available aside the money market due to the volatility of the stock market.
However, the equity market closed on a mildly positive note on Wednesday as the All Share Index increased marginally by 0.001 percent to close at 28,344.33 points.
The market cap of equities listed on the Nigerian Stock Exchange (NSE) marginally increased to ₦14.8151 trillion. The total volume traded closed with an exchange of 218.425 million units valued at N3.14 billion traded in 3,896 deals. The market breadth was positive with 14 gainers as against 11 losers.