Investors stake N3.35trn as T-bill yield falls to 16.84%

Investors showed strong appetite for Nigerian Treasury Bills on Wednesday, submitting N3.35tn in bids at the Central Bank of Nigeria’s latest primary market auction as the yield on the one-year instrument fell further to 16.84 per cent.

The demand came despite the CBN offering securities worth N700bn, with the apex bank eventually allotting N865.71bn across the three maturities.

The 364-day bill remained the clear favourite among investors, accounting for N3.238tn of the total subscriptions. Against an advertised N500bn, the CBN allotted N762.17bn, representing an additional N262.17bn above the offer.

The stop rate on the one-year instrument was reduced by 31 basis points from the 17.15 per cent recorded at the previous auction on August 26.

It marks the second consecutive decline in the rate, bringing the cumulative reduction to 75 basis points from 17.59 per cent on August 12 to the latest 16.84 per cent.

Investor interest was considerably weaker in the shorter-dated securities.

The 91-day bill attracted N76.82bn in subscriptions against N100bn offered, while N76.28bn was allotted at a stop rate of 16.30 per cent.

Similarly, the 182-day instrument recorded N33.51bn in bids for N100bn on offer, with the CBN allotting N27.27bn at 16.50 per cent.

The securities are scheduled to mature on December 3, 2026, March 4, 2027 and September 2, 2027, respectively.

The latest auction further highlights investors’ preference for longer-term government securities, particularly the 364-day bill, while appetite for shorter maturities remains relatively subdued.

The shift comes after a period of rising yields in the Treasury bills market. The one-year rate moved from 16.35 per cent on June 3 to 17.34 per cent on June 17 before climbing to 17.70 per cent on July 8 and 17.59 per cent on August 12.

Since then, the direction has reversed, with the rate falling to 17.15 per cent at the August 26 auction before Wednesday’s further decline.

The latest stop rate also remained close to the secondary market yield, which stood at 16.74 per cent.

Market analysts may interpret the continued decline in Treasury bill yields as an indication that the CBN is increasingly comfortable with lower government borrowing costs amid sustained demand for fixed-income securities.

The development could also fuel expectations of softer monetary conditions, particularly as investors await the outcome of the CBN’s September Monetary Policy Committee meeting.