By Dipo Olowookere
The treasury bills market was bullish on Wednesday as investors heavily participated in the primary market auction conducted by the Central Bank of Nigeria (CBN).
The apex bank offered fresh T-bills worth N207 billion to investors, which it eventually raised from the exercise.
Though the 91-day and 182-day bills received moderate subscriptions from market players, the 364-day paper was oversubscribed.
Of the N24.96 billion worth of the 91-day bills, subscriptions worth N22.73 billion were received and sold at 11 percent.
Also, of the N44.99 billion worth of the 182-day bills put up for sale by the central bank, N38.75 billion was received and sold at 12.30 percent.
However, the CBN received subscriptions worth N146.07 billion from the 364-day bill, but the bank sold N145.48 billion of the paper at 13.05 percent.
Business Post reports that at the close of market yesterday, treasury bills yield at the secondary market declined by 0.20 percent.
According to Zedcrest Research, the market is expected to be intensely bearish in today as market players react to this relatively unexpected turn of events.
As stated earlier, selloffs would be moderated if the CBN holds rates at the OMO auction tomorrow.
Meanwhile, the average money market rate appreciated by 0.79 percent on Wednesday to settle at 11.17 percent.
While the Open Buy Back (OBB) rate rose to 10.58 percent from 9.92 percent, the Overnight (OVN) rate flew to 11.75 percent from 10.83 percent.
This came on the backdrop of a continued decline in the net system liquidity figure, down to N160 billion in published opening figures.
The decline in system liquidity could be attributed to the persistent interventions by the CBN in various segments of the FX markets, in a bid to sustain the stability of the Naira amid decline in offshore inflows.
The rates are expected to trend slightly lower today with inflows from OMO maturities and retail FX refunds expected to bolster system liquidity.
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