Nigeria’s latest treasury bills auction, conducted on February 19, 2025, saw total subscriptions hit N2.41tn, reflecting sustained investor interest across the three tenors on offer.
However, this marked a decline from the N3.22tn recorded in the previous auction held on February 5, 2025. This is according to the auction results seen by The PUNCH on Thursday.
The Central Bank of Nigeria increased allotments, particularly for the 364-day tenor, while stop rates edged lower, signalling a shift in investor sentiment and yield expectations.
The auction results showed a marked increase in demand for shorter-term treasury bills, with the 91-day and 182-day instruments witnessing significant jumps in subscriptions compared to the preceding auction
The 91-day bills, which had an offer size of N80bn, attracted N62.14bn in subscriptions, an increase from N42.37bn recorded in the February 5 auction.
The CBN allotted N34.77bn, while the top rate dropped to 17 per cent, lower than the 18 per cent in the previous auction.
Similarly, the 182-day bills, with an offer size of N120bn, saw subscriptions rise to N49.88bn, up from N19.52bn.
The apex bank allotted N34.98bn at a stop rate of 18 per cent, slightly lower than the 18.5 per cent recorded in the last auction.
On the other hand, demand for the 364-day bills, which have traditionally attracted the highest subscriptions, declined significantly.
The tenor had an offer size of N500bn but recorded a drop in total subscriptions to N2.3tn, down from N3.16tn recorded in the February 5 auction.
Despite this lower demand, the CBN increased its allotment to N704.38bn, compared to N619.36bn in the previous auction.
The stop rate for the 364-day bills also fell, settling at 18.43 per cent, down from 20 per cent.
Bids for this tenor ranged from 16.5 per cent to 25 per cent, indicating strong competition among institutional investors seeking longer-term government securities.
The declining stop rates across all three tenors suggest that investors are willing to accept lower yields, reflecting an adjustment in expectations.
The maturity dates for the successful bids are May 22, 2025 (91-day bills), August 21, 2025 (182-day bills), and February 19, 2026 (364-day bills), offering different durations for portfolio planning and liquidity management.
The downward movement in stop rates aligns with trends in the fixed-income market, where yields have been moderating amid stable liquidity conditions.
The lower yields may be linked to the CBN’s liquidity management efforts, as reduced treasury bill rates help the government lower its borrowing costs while keeping liquidity levels balanced within the financial system.
However, the declining stop rates also indicate growing competition for risk-free assets, with investors bidding aggressively to secure allocations despite the drop in yields.
Despite the dip in total subscriptions, the sustained demand for Nigerian treasury bills underlines the attractiveness of government securities in the current economic environment.