There were indications that Nigeria would raise N129.17 billion ($649.10 million) worth of local currency denominated Treasury Bills (T-Bills), with varying maturities of three months and one year on December 2.

The debt instrument, according to Central Bank of Nigeria, will be made up of N17.85 billion for the three-month paper; N18 billion in the six-month paper; and N93.32 billion in the one year bill, through the Dutch Auction System.

Meanwhile, yields on Nigeria’s bonds fell below 10 per cent across maturities on Wednesday’s trading session, a day after the apex bank announced a surprise interest rate cut aimed at stimulating lending.

Traders said they are expecting lower returns on the short-date paper at the auction next week in tandem with the prevailing trend in the secondary market. The naira and bond yields fell sharply on Wednesday while stocks rose.

CBN had cut benchmark interest rate to 11 per cent from 13 per cent, its first reduction in the cost of borrowing in more than six years, amid hard hit condition by a plunge in crude prices.

“On the back of the reduction in policy rates … investors are reconsidering investment in the equities market to earn higher return. We anticipate further moderation in bond yields,” the Head of Research at Afrinvest Securities Limited, Ayodeji Ebo, said.

Credit: Guardian