CBN unveils N815 billion treasury programme in Q4
The Central Bank of Nigeria (CBN) may have concluded plans to set the nation’s monetary policy environs agog in the fourth quarter (Q4), with N815 billion Treasury Bills issuance programme.
While the said amount would be the total value of the 91, 182 and 364 days maturing bills for the last quarter of the year, the apex bank would be rolling the same amount over on maturity.
The development is in contrast to a total of N966 billion worth of 91, 182 and 364 days maturing bills, with N874 billion of the amount rolled over in the period, while N196 billion is yet to mature under the 182 and 364-day bills.
Still in the last quarter, the treasury bills- 91-day, worth N215.2 billion; 182-day, put at N239 billion; and 364-day, estimated at N419.3 billion were all rolled over.
But in the new programme, the 91-day bill worth of N215.2 billion would be maturing in the period under review and rolled over simultaneously, with N57.4 billion of the amount in September; N62.1 billion in October; N77.5 billion in November, and N18 billion for December.
For the 182-day bill, N61 billion would be maturing and as well rolled over in September; N68.4 billion in October; N46.4 billion in November; and N18 billion in December.
However, the 364-day bill, which would also follow the trend, will have N59.1 billion in September; N134 billion in October; N119 billion in November; and N93.3 billion in December.
Meanwhile, Afrinvest Securities Limited, in a report at the weekend, noted that sentiments were mixed across term structure in the bond market last week, as the short to mid-term rates mostly rose while long term rates declined, save for the JUL-2034 and NOV-2029 instruments.
The bearish sentiment consequently led to a 0.2 per cent week-on-week increase in average yields across tenors to 15.9 per cent, which is consistent with the performance in recent past.
According to the security company, activity level in the market was tempered at the start of the week as most institutional investors closed books for the month of August.
It however improved the rest of the trading days, with trading activities concentrated on four trading benchmarks- APR-2017, JAN-2022, MAR-2024 and JUL-2034.
“We continue to see opportunities and significant upside potential in the Nigerian bond market, especially at the short end of the curve where most instruments are trading at a significant discount.
“The elevated risk of a probably currency devaluation has been a major drag in the market, especially foreign investor participation, even as global monetary policy appears broadly accommodative. The U.S. Federal Reserve is expected to hold off on raising rates this month, while the European Central Bank has committed to maintaining loose monetary policy due to the fragility in global growth.
“This may be enough to swing sentiments positive in emerging market bonds markets, while the continuous lull in domestic equities market indicates the fixed income market will remain attractive for domestic investors seeking to preserve value.
“However, in the absence of a review in the foreign exchange rate, which the CBN is presently committed in defending, the risk perception of the Nigerian market will remain high, and hence yields will continue to trend at the present high levels,” Head of Research at the company, Ayodeji Eboh said.