Potential investors in Nigeria should not go to sleep yet as Nigeria’s Central Bank of Nigeria has scheduled to sell by auction N109.7bn Treasury Bills on the Primary Market Auction on Thursday, May 2, 2019. 

The Deal 

In simplest terms, the deal can be summarised as follows:

• The CBN is prepared to auction N109.7bn worth of Treasury bills on the Primary Auction Market, usually on the Nigerian Stock Exchange.
  
  
• The Treasury bills of N109.7bn are spread into different maturity periods. 
• The first N28.0bn has a maturity period of 91-day; N43.5bn has a maturity period of 182-day, while N38.2bn has a maturity period of 364 days.

Investors Are Preferring Longer Term Treasury Bills

When the Central Bank of Nigeria resumed its customary Open Market Operation auctions on Tuesday last week, a total of N200bn spread into 93-day, 184-day and 359- day tenors were offered.

Investors dived for the longer term treasury bills of 359-day, oversubscribing it in the ratio of 2.8x, meaning that investors are showing continued preference for long-term instruments. However, the short- and medium-term instruments were under-subscribed with a bid to cover ratio of 0.2x and 0.03x, respectively.

Also See: More Funds – Now Available For Nigerian Small And Medium Enterprises

More People Are Buying Treasury Bills

The Treasury bills secondary market has been overwhelmed by investors for the fourth consecutive week now as more money keep flying into the treasury bills market.

Average yields on all treasury bills is now 13.1 per cent as of April 24, 2019.

Subscribing to treasury bills in Nigeria has been made easier by such mutual funds companies as Afrinvest or Cordros Capital

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.