₦airaland Forum

Navigating fixed income opportunities requires balancing security against shifting yield returns. In a clear display of market liquidity, institutional investors flooded the latest CBN Treasury Bills auction yield drop, sending total subscriptions soaring to N3.62 trillion.

The heavy demand pushed the stop rate on one-year paper down by 31 basis points to 17.35 percent.

Official auction results confirm that the Central Bank of Nigeria allocated N1.25 trillion across all tenors, easily absorbing excess liquidity while lowering short-term government borrowing costs.

The Backstory of System Liquidity and Rate Cuts

To understand why investors rushed into government debt, one must examine recent shifts in monetary policy and liquidity management. Over past quarters, high monetary policy rates created strong yields on government debt, making short-term sovereign paper extremely attractive.

However, elevated borrowing rates sparked concerns among business leaders regarding private sector crowding out.

Under Central Bank Governor Olayemi Cardoso, monetary authorities aimed to stabilize systemic inflation while gradually reducing public debt service burdens. Consequently, as commercial banks and pension fund managers sought to lock in strong returns before broader monetary easing began, demand for long-tenor bills reached unprecedented levels.

Auction Breakdown and Subscriptions

The final primary market auction for July showcased massive demand concentrated heavily at the long end of the yield curve. Institutional fund managers rushed to lock in guaranteed returns, driving subscription levels nearly seven times above the advertised offer size.

According to official debt auction records published by BusinessDay, key performance figures across the three auction tenors include:

364-Day Bill Demand: Subscriptions reached N3.38 trillion against a N500 billion offer, resulting in an allotment of N1.02 trillion
One-Year Stop Rate: Dropped to 17.35 percent from 17.66 percent recorded during the previous auction cycle
91-Day Bill Results: Attracted N135.74 billion in bids for a N100 billion offer, keeping stop rates flat at 16.30 percent
182-Day Bill Performance: Recorded N104.74 billion in total bids against a N100 billion offer, holding steady at 16.50 percent
Commenting on the wider economic impact of high government borrowing rates, Top Financial Analyst and former Presidential Economic Advisor, Dr. Tope Fasua, noted:

“Elevated interest rates on government bills risk squeezing out private enterprises from domestic debt markets. Easing these stop rates provides essential relief for broader economic growth.”

What Lower Yields Mean for Financial Markets
Looking ahead, the successful lowering of the one-year stop rate signals a gradual moderation in domestic borrowing costs for the federal government.

As central bank officials continue executing their third-quarter issuance schedule, strong market liquidity ensures steady appetite for government securities.

For commercial lenders and corporate borrowers, lower sovereign yields could eventually pave the way for cheaper commercial credit, helping drive real-sector investments across Nigeria’s evolving financial landscape.

https://naijaeyesblog.com/nigerian-treasury-bills-see-high-demand-as-rates-fall/]

Good one


Who will give me insight on how to invest in this TB of a thing?

Which bank will I approach?

Resultant effects is what we seek not just on paper.
What works perfectly in other countries do not see the light of the day in Nigeria because people are the top continue to strangle those below.

I'm yet to understand this Treasury bill stuff

What do you expect when the stock market is doing much better

There is confidence in repayment as there are measures in place

Annoyingly, you will see those who don't know jack about basic economy will still be blaming this government for not doing anything

The Village ITK dem

nnanyereugo:
I'm yet to understand this Treasury bill stuff

It's like borrowing government money for short term in expectations for reasonable interest

nwakibie3:
Good one


Who will give me insight on how to invest in this TB of a thing?

Which bank will I approach?

Stanbic IBTC, UBA and others

nwakibie3:
Good one


Who will give me insight on how to invest in this TB of a thing?

Which bank will I approach?

Your bank account manager.

In early January, my friend compared the rates from six leading banks in Nigeria and he chose zenith bank.
In the secondary market, the rate is not fixed over time.
It can be 16% in the morning and higher (or lower) in the next hour.
You should compare the rates from different bank before you decide where to put your money.

A friend just locked in 200 million face value on a one year tenure at 16.59% from UBA. That's a cool 32 million quid received immediately and which he didn't need to put in extra work for and with zero risk. It's a no brainer. Banks too are making it easy because their fixed deposit rate is coming in at 14%. No reasonable person will give the bank money for fixed deposit at 14% when the Baba being FG is giving you 16.59%>. What's more? If you're buying from the TB primary market, that's even more, coming in at 17.59%. and it's paid upfront not like Fixed deposit that pays upon maturity. CBN is beating banks at their own game now.

NaijaHelper1:
A friend just locked in 200 million face value on a one year tenure at 16.59% from UBA. That's a cool 32 million quid received immediately and which he didn't need to put in extra work for and with zero risk. It's a no brainer. Banks too are making it easy because their fixed deposit rate is coming in at 14%. No reasonable person will give the bank money for fixed deposit at 14% when the Baba being FG is giving you 16.59%>. What's more? If you're buying from the TB primary market, that's even more, coming in at 17.59%. and it's paid upfront not like Fixed deposit that pays upon maturity. CBN is beating banks at their own game now.

people with old money will enjoy this economy, even bonds and mutual funds are doing well. Clock 17-18% yoy

nwakibie3:
Good one


Who will give me insight on how to invest in this TB of a thing?

Which bank will I approach?

You dont know how google works?

nwakibie3:
Good one


Who will give me insight on how to invest in this TB of a thing?

Which bank will I approach?

Consider ease of withdrawal too
- commercial paper
- mutual funds
- bonds

My good people, who knows or uses I-invest for their investment. Are they reliable? From my findings online, it belongs to Parthian Partners and are regulated by SEC.

They have more TBills options to choose from and I just want to be sure it's a good platform before putting my money there. Please any input will be appreciated

Hemanwel:
Wait! Am I missing something? Isn't it something to worry about that the interest rates have dropped from 18% to 17.35?

Economy is getting better na

Gotocourt:
Economy is getting better na

It used to be higher than the current rate.

This post is only for people like us that went to school

NaijaHelper1:
A friend just locked in 200 million face value on a one year tenure at 16.59% from UBA. That's a cool 32 million quid received immediately and which he didn't need to put in extra work for and with zero risk. It's a no brainer. Banks too are making it easy because their fixed deposit rate is coming in at 14%. No reasonable person will give the bank money for fixed deposit at 14% when the Baba being FG is giving you 16.59%>. What's more? If you're buying from the TB primary market, that's even more, coming in at 17.59%. and it's paid upfront not like Fixed deposit that pays upon maturity. CBN is beating banks at their own game now.

What if I invest 7m..... is that good enough?

nwakibie3:
Good one


Who will give me insight on how to invest in this TB of a thing?

Which bank will I approach?

You can simply still get that via Bamboo app.

nwakibie3:
Good one


Who will give me insight on how to invest in this TB of a thing?

Which bank will I approach?

Visit commercial banks, the one with the highest percentage is the one you invest with.


You have to bargain your way

keemsleek:
What if I invest 7m..... is that good enough?

The amount you're considering is lower than 50 million which is the lowest amount you need to buy directly from the FG. Even that window has closed too. Your other option is to buy from the banks in what is called the secondary market. So the banks because they have alot of money, buy from the primary market, then sell to people who can't meet that threshold of 50m through the secondary market.
The tenure (that's the time your principal remains with them) varies and is set by the banks. As of last week, UBA was offering 16.59% for 365 days. It changes everyday and is published daily so you'll need to get into the Bank to find out the day's rate. Assuming you want to purchase with that amount for the 365 days, you get N1,161,300. Paid upfront then your principal will be returned when the tenure expires. So that's for you to decide if it's enough.

keemsleek:
What if I invest 7m..... is that good enough?

Yes, email your bank they’ll advise you accordingly.

WantsandMore:
people with old money will enjoy this economy, even bonds and mutual funds are doing well. Clock 17-18% yoy

You're not wrong. If you are wealthy, this present government presents you opportunity to remain so and become even wealthier. If you're poor, then you're even poorer now.

At 17% flash rate minus a 15% inflation rate you are really not making much progress. There are better investments out there. The only attraction of T-Bills is the risk profile.

You can only truly profit from the market if you are out there where similar rates are single digit and you invest here capitalizing on the relatively stable exchange rates (for now).

So it answers the guy who was saying there is no advantage relocating overseas. This is one of the reasons why.

nnanyereugo:
I'm yet to understand this Treasury bill stuff

Nothing big there...

Just you loaning FG your money with interest.

The interest ranges from 16-18% depending on the bank you give your money to.

The interest na instant dem go give you once you borrow dem dey money.

nwakibie3:
Good one


Who will give me insight on how to invest in this TB of a thing?

Which bank will I approach?

Go to First Bank or Stanbic

helinues:
What do you expect when the stock market is doing much better

There is confidence in repayment as there are measures in place

Annoyingly, you will see those who don't know jack about basic economy will still be blaming this government for not doing anything

The Village ITK dem

Oga that doesn't translate to real investments that create jobs. These are just portfolio investors that bet on inflationary pressures going up to push yield on T-bills. Stop deceiving people.

nwakibie3:
Good one


Who will give me insight on how to invest in this TB of a thing?

Which bank will I approach?

Kindly download Bamboo app,sign up and invest through the app.