The Central Bank of Nigeria (CBN) will offer Treasury bills worth ₦332.52 billion to investors in a primary market auction scheduled for Friday. Acting through the Debt Management Office (DMO), the apex bank plans to split the offering across the standard maturities of 91, 182, and 364 days, targeting banks and asset managers.
Despite prevailing liquidity constraints in the money market, which have forced banks to tap the standing lending facility, analysts anticipate robust demand for the auction.
Market Activity Ahead of Auction
In the secondary market, trading activities softened earlier this week, showing a mild bullish trend. Analysts observed strong interest in the 11-September and 11-December Treasury bills, which led to a decline in yields across various tenors.
Specifically, the average yield fell by 2 basis points (bps) for short-term bills, 27 bps for mid-term bills, and 2 bps for long-term bills. Investors showed particular interest in bills with 79-day (-2 bps), 149-day (-151 bps), and 331-day (-2 bps) maturities.
Overall, the average benchmark yield dipped by 2 bps to close at 25.56% in the secondary market. Similarly, yields in the Open Market Operations (OMO) segment decreased by 5 bps to 27.2%, reflecting sustained demand.
Implications for Investors
The Treasury bills auction presents an opportunity for investors to lock in returns amid fluctuating yields and tight market liquidity. Analysts predict that the auction will attract significant participation, with investors seeking to optimise portfolio allocations across various maturities.
The continued interest in Nigerian Treasury bills underscores their appeal as a low-risk investment vehicle in a challenging economic environment.
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