Dipo Olowookere
By Dipo Olowookere
It seems foreign portfolio investors are beginning to reconsider putting their money in Nigeria again as a result of the attractive rates on offer.
For a while, the sale of treasury bills through the Open Market Operations (OMO) had been marred with inactivity as offshore investors shun the exercise ostensibly due to the global uncertainty, but Thursday’s exercise was different.
During the session, the three maturities auctioned by the Central Bank of Nigeria (CBN) were oversubscribed, though more of the demands are still on the long-dated instrument.
OMO bills worth N100 billion were auctioned across 89-day, 180-day and 341-day tenor, but the bank received subscriptions worth N323.8 billion.
According to the analysis, N10 billion worth of the short-dated bill were offered for sale, another N10 billion worth of 180-day instrument were auctioned, while N80 billion worth of 341-day maturity were offered to non-resident investors, who are the main target of the exercise because of forex.
When the bids were analysed, investors staked N64.10 billion on the short-dated bill, N33.50 billion was staked on the mid-dated bill, while N226.16 billion was staked on the long-dated bill.
For the allotment, the central bank sold a total of N122.65 billion out of the N100 billion it brought to the market for sale, allotting N20.37 billion for the 89-day bill, N11.50 billion for the 180-day bill and N80.78 billion for the 341-day bill.
Business Post reports that while the stop rates for the 89-day and 180-day bills were retained at 11.50 percent and 11.54 percent respectively, the 341-day rate was marginally lowered by 0.04 percent to 12.71 percent from 12.75 percent.
Meanwhile, the Open Buy Back (OBB) rate and the Overnight (OVN) rate closed mixed yesterday, with the former gaining 0.08 percent and the latter losing 0.10 percent on a day the market witnessed OMO maturities worth N226 billion.
The OBB rate increased to 1.88 percent from 1.80 percent, while the OVN rate decreased to 2.00 percent from 2.10 percent.
