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Nigeria’s One-Year Treasury Bill Oversubscribed by 300%

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FG Borrows

Nigeria’s one-year treasury bill was oversubscribed by 300% during the recent Primary Market Auction conducted by the Central Bank of Nigeria (CBN) on Wednesday.

The auction, aimed at rolling over maturing Nigerian Treasury Bills worth N1 trillion, saw unprecedented demand for the one-year T-bill.

Investors offered a total of N1.87 trillion for the N600 billion on offer, indicating a significant appetite for government securities. Out of the total subscriptions, N908.75 billion was allotted, with stop rates set at 19%.

The auction covered maturities across three different tenors: 91-day, 182-day, and 364-day bills, with varying amounts on offer.

While the 91-day bill received N39.90 billion in offers, all were sold, and the 182-day bill garnered N76.83 billion subscriptions, out of which N51.35 billion was allotted.

Managing Director of Arthur Steven Asset Management, Tunde Amolegbe, attributed the remarkable performance of the one-year bills to investor confidence in the current government and its reform initiatives.

He highlighted investors’ preference for higher rates due to signals from the CBN indicating tightening monetary policies amid accelerating inflation.

Experts view the oversubscription as a testament to investors’ trust in the government’s reforms and management of the country’s debt obligations.

The auction reflects a move by the CBN to address liquidity in the financial system while managing Nigeria’s debt obligations effectively.

The significant oversubscription signals robust investor confidence and highlights the attractiveness of Nigerian government securities despite prevailing economic challenges.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Treasury Bills

DMO Breaks Records with N457.20 Billion T-Bill Sales in August 2023

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Nigeria’s Debt Management Office (DMO) achieved a historic milestone in August 2023 by selling Treasury Bills (T-Bills) valued at an astounding N457.20 billion.

This achievement, as reported in the FMDQ Markets Monthly Report for August, marked a significant 12.58% Month-on-Month (MoM) increase compared to July’s N406.10 billion in T-Bill sales.

The record-breaking T-Bill sales not only signify the DMO’s effectiveness in managing the nation’s debt but also underscore the growing investor confidence in Nigeria’s financial landscape.

The surge in T-Bill sales comes amidst economic uncertainties and global market fluctuations, highlighting the resilience of Nigeria’s debt market.

T-Bills, with their short-term maturities, are a crucial instrument in the Nigerian government’s debt management strategy. The increased demand for these bills reflects investor appetite for low-risk, short-term investments, especially during times of market volatility.

While the DMO’s success in T-Bill sales steals the spotlight, it’s worth noting that the agency also sold Federal Government Bonds (FGN Bonds) worth N230.26 billion in August 2023.

However, this figure experienced a 65.00% MoM decrease compared to the N657.84 billion sold in July 2023 for similar FGN Bond maturities, mainly due to a 63.96% undersubscription.

Overall, the DMO’s performance in August 2023 signals the country’s commitment to sound fiscal management and its ability to navigate challenging financial terrain with confidence.

It serves as a testament to Nigeria’s attractiveness as an investment destination in the midst of global economic uncertainties.

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