Nigeria’s T-bills 4 times over-subscribed
Nigeria’s latest Treasury bill auction was four times oversubscribed. The country’s debt management office sold one-year government bonds at 15.72 per cent, which is lower than the 17 per cent it paid at the last auction.
Fri, 06 Oct 2017 14:08:34 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- Oversubscription in the Treasury bill auction indicates strong demand for government bonds.
- The drop in yields from 17% to 15.72% reflects investors' appetite for higher returns.
- Factors such as improved investor confidence, stable foreign exchange rates, and regulatory interventions have contributed to the positive market sentiment.
Nigeria's latest Treasury bill auction saw overwhelming demand as it was four times oversubscribed. The country's Debt Management Office successfully sold one-year government bonds at a yield of 15.72%, which is a significant drop from the 17% rate recorded at the last auction. This surge in demand and the subsequent drop in yields have been attributed to a variety of factors, particularly the influx of foreign investors seeking higher returns in the Nigerian fixed income market. Oluseyi Akinbi, Head of Securities at Zedcrest Capital, shed light on the recent developments in the fixed income and forex markets during a CNBC Africa interview. Akinbi highlighted the positive impact of improved investor confidence, stable foreign exchange rates, and sizable inflows through the Investors’ and Exporters’ (I&E) window on the market dynamics. The robust demand for T-bills and bonds, coupled with the stability in the foreign exchange market, has positioned Nigeria's financial markets for further growth and attractiveness to investors. The country's inflation rate has seen a downward trend from 18.5% at the beginning of the year to a projected 13-15.5% by year-end, offering investors an opportunity to maximize their earnings in the bond market. The stability of the Naira within the range of 360-373 to the US dollar has also contributed to the positive sentiment in the forex market. Despite occasional fluctuations, the currency has held steady due to regulatory interventions and the confidence of market participants. Akinbi pointed out that the Central Bank of Nigeria's consistent intervention in the forex market, coupled with the rise in reserves, has bolstered investors' confidence and contributed to the overall positive outlook. The interview also touched on the true value of the Naira, with Akinbi noting that the currency's current trading range reflects the regulators' comfort level, indicating a 'new normal' for the exchange rate. Overall, the outlook for Nigeria's financial markets appears promising, driven by increased demand for fixed income instruments, stable foreign exchange rates, and regulatory measures to ensure market stability.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.
