Treasury Bills: N361bn Subscription Raises Market Liquidity

The Treasury Bills (T-bills) has recorded improved performance for the second consecutive week as market liquidity and buying interests rise, financial market analysts have said.

The market recorded an allotment of N130 billion against a total subscription of N361 billion, analysts at Afrinvest West Africa said. The 91, 182 and 364-day bills were fully oversubscribed at the last Primary Market Auction.

Also, stop rates across all tenors declined due to improved system liquidity and higher subscription as the 91, 182 and 364-day rates dropped to 11.85 per cent from 11.95 per cent; 13.50 per cent from 13.65 per cent and 13.50 per cent from 13.70 per cent respectively.

The Federal Government has also paid off about N130 billion worth of T-Bills which matured last week instead of rolling over the debt as was the previous practice, traders said.

Director-General of the Debt Management Office (DMO), Patience Oniha, confirmed the payment last Friday and said a treasury auction calendar for March would be released this week. Nigeria issued a $2.5 billion Eurobond last month to help redeem portions of its T-Bills portfolio to lower costs.

It has been working to lower its costs, particularly as inflation fell for the 12th time in a row in January. Treasury yields have been falling on expectations that the government will sell less debt at its second quarter auction after it sold the Eurobond. Traders expect rates to fall further after the pay off.

Finance Minister Kemi Adeosun last month said the country would redeem N762.5 billion worth of T-Bills. Nigeria has a T-Bill portfolio of N2.7 trillion ($8.6 billion). It paid off N198 billion worth of bills in December, leading to rates dropping by around 300 basis points.