The Central Bank of Nigeria (CBN) recorded an oversubscription at its latest Treasury Bills (T-Bills) Primary Market Auction, despite a notable decline in total investor bids.
The auction, which held during the week ended May 9, saw the apex bank increase its total offer to N550 billion, up from N400 billion in the previous exercise across the 91-day, 182-day and 364-day tenors.
According to auction results and analysis by Meristem, total subscriptions declined by 29.45% to N1.01 trillion, compared to N1.43 trillion in the previous auction.
Nonetheless, the CBN allotted N598.33 billion, exceeding its initial offer and reflecting an 8.79% increase in allotments relative to the prior week.
Investor appetite remained heavily skewed toward the 364-day instrument, which attracted N956.88 billion in bids, accounting for approximately 88% of total subscriptions.
Demand for the 91-day and 182-day tenors was relatively muted, a trend consistent with investor preference for higher-yielding longer-dated bills amid prevailing macroeconomic conditions.
Stop rates on the 91-day and 182-day tenors were unchanged at 18.00% and 18.50% respectively, while the 364-day tenor saw a marginal increase to 19.63%, indicating cautious rate repricing by the CBN in line with investor expectations and liquidity dynamics.
In the secondary market, average yields on T-Bills declined by 10 basis points week-on-week, settling at 20.97% from 21.07% in the previous week.
Meristem noted that unsuccessful bidders at the primary market likely contributed to the increased activity and moderated yields in the secondary space.
Yields on short-dated maturities dropped by 4 basis points, while the 6-month, 9-month and 12-month papers witnessed mixed movements—declining by 3bps, 48bps and 7bps respectively.
The significant movement on the 9-month paper reflects renewed investor interest in medium-tenor instruments amidst shifting monetary expectations.
Separately, the CBN conducted an Open Market Operations (OMO) auction during the week, offering N500 billion across 315-day and 329-day tenors.
The auction was oversubscribed, drawing N773.74 billion in total bids, with N756.74 billion allotted. Stop rates cleared at 22.65% and 22.72%, further indicating tighter liquidity and elevated return expectations among market participants.
In the bond segment, average yields closed slightly lower at 19.04%, down from 19.07% in the prior week, driven by marginal declines in benchmark papers such as APR-33s, JUN-35s and JUL-37s.
Meanwhile, the Eurobond market saw increased buying interest, with the average yield falling 18 basis points week-on-week to 10.12%. Major declines were recorded in NOV-25, MAR-29, and JUN-31 Eurobonds while the NOV-27 paper saw a marginal yield increase.
Analysts at Meristem attributed investor behaviour across the fixed income market to evolving yield dynamics, liquidity rebalancing, and broader macroeconomic signals.
