Stable macroeconomic indices are boosting investors’ confidence as they bet on longer-dated instruments, taking the bull position in the hope that the instrument prices would rise in the future and make a profit.
Thus, given the moderating yield environment as well as the impact of the downward trend in inflation, analysts say they expect investors’ appetite in longer-tenored instruments to be sustained
Indeed performance in the treasury bills market was largely bullish last week, reversing a 2-week bearish run as average rate across tenors trended lower on four of five trading sessions. The week began on a bearish note as average rate across benchmark tenors rose 45bps to 13.4 percent from 12.9 percent recorded in the prior week.
However, this trend was reversed by Tuesday with average rate falling 47bps to 12.9 percent and this was sustained on Wednesday (-2bps) and Thursday (-8bps) to settle at 12.8 percent on Friday; indicative of a 19bps decline w-o-w.
During the week, the CBN carried out a Primary Market Auction (PMA) in which the 91-day (Offered: N3.4bn, Subscription: N3.7bn, Allotted: N3.4bn), 182-day (Offered: N16.9bn, Subscription: N20.9bn, Allotted: N16.9bn) and 364-day (Offered: N13.5bn, Subscription: N48.6bn, Allotted: N13.5bn) instruments were issued at stop rates of 10.0%, 10.5% and 10.7% respectively. All instruments were oversubscribed and allotted as offered.