The Central Bank of Nigeria (CBN) plans to issues the Nigerian Treasury Bills (NTB) worth N1,002 billion for various tenor buckets in the fourth quarter of this year.
The Nigerian Treasury Bills programme released by the regulator on Wednesday, show that the same amount will be maturing during the same period. However, the CBN noted that auction amounts are subject to change without notice.
A breakdown of the NTB programme revealed that N9.62 million will be issued for 91 days tenor while the same amount will mature during the same period.
Investors are expected to position for medium term investment as the Apex bank will auction a total of N90.18 million for 182 days tenor. The same amount will also mature over the same period.
For the 364 days tenor, the CBN will auction the sum of N821.84 million to investors, while the same amount will mature in the fourth quarter.
The CBN in the third quarter (Q3) 2019 issued a total of N809.4 billion worth of Treasury Bills for various tenors.
The bearish sentiments in Treasury Bills secondary market ceased last week, following robust system liquidity (about N704.7bn positive as at Friday) that incited local demand across the yield curve. As a result, activities were largely bullish during the five trading sessions of the week as investors rallied for higher yields despite the CBN intervention at the Primary Market auction on Wednesday as well as its Open Market Operations auction on Thursday and Friday according to analysts Afrinvest Securities Limited.
Major buying interests were witnessed at the short and medium end of the curve, particularly the 5-Dec-19 (-231bps), 9-Jan-20 (-228bps) and 24-Oct-19 (-205bps) maturities. Consequently, average yield across all tenors contracted by 140 bps W-o-W to settle at 13.8% from 15.2 percent the previous week.
According to the analysts, at the PMA which held on Wednesday, the CBN offered N208 billion worth of T-Bills as against the N347.8 billion total subscription, translating to a bid to cover ratio of 1.7x vs 4.3x at the previous auction. All tenors were oversubscribed with the 364-day instrument enjoying the most interest. Consequently, the marginal rates across all tenors inched higher by 1.4 percent, 0.2 percent and 0.9 percent respectively as the CBN fully allotted to the total amount offered.
In 2018, the total value of NTBs issued and allotted was N3.34 trillion apiece, indicating a decline of N1.15 trillion or 25.65 per cent below the level in 2017.
The decrease was attributable largely to lower NTBs issued coupled with the redemption of treasury bills worth N78.05 billion in December 2018 as the Government indicated its preference for cheaper and longer tenored foreign debt.
Total public subscription stood at N6.71 trillion, compared to N7.17 trillion in 2017. The lower level of public subscription was traceable to the high patronage at Open Market Operation (OMO) auctions.