- October treasury bill soar by 25.21%
CEM REPORT, FINANCE | The Debt Management Office’s (DMO) has announced the commencement of the subscription process for two-year and three-year Federal Government of Nigeria bonds for December 2023, offering lucrative interest rates of 12.287 per cent and 13.287 per cent, respectively.
The subscription window is open for five days, running from December 4th to December 8th, 2023. These bonds are slated to mature on March 13th, 2024, with quarterly coupon payments scheduled.
Under the Debt Management Office (Establishment) Act 2003, the DMO is authorized to receive applications for the Federal Government of Nigeria saving bonds, affirming the full backing of these bonds by the federal government.
The interest rates for the two-year and three-year bonds are specified at 12.287 per cent and 13.287 per cent per annum, respectively. Investors can subscribe in units of ₦1,000, with a minimum subscription of ₦5,000 and subsequent multiples of ₦1,000, up to a maximum limit of ₦50,000,000.
Interested investors are encouraged to engage with authorized stock brokerage firms, facilitating the subscription process for these bonds, which are actively traded on the Nigerian Exchange Group (NGX).
In a related context, the DMO’s previous financial activities reveal a robust market performance. In October 2023, Treasury Bills valued at N406.90 billion were sold, marking a 25.21 per cent month-on-month increase. FGN Bonds worth N374.76 billion were also sold, reflecting a 104.10 per cent oversubscription and an 18.41 per cent month-on-month increase.
The Central Bank of Nigeria (CBN) participated in the market, selling OMO Bills worth ₦400.00 billion in October 2023. Meanwhile, non-sovereign bonds listed on the FMDQ Exchange in October decreased by 80.00 per cent month-on-month, originating solely from a corporate issuer in the financial services sector.
Commercial Papers (CPs) quoted on the FMDQ Exchange experienced a significant month-on-month decrease of 75.03 per cent, but the total outstanding value for CPs increased by 2.39 per cent to ₦948.56 billion.
“Quoted CPs were issued by institutions from various sectors including financial services (5), manufacturing (5), agriculture (2), health & pharmaceuticals (1), and real estate (1).
As a result, the total outstanding value for CPs increased MoM by 2.39% (₦22.15 billion) to N948.56 billion in October 2023,” it said.
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The secondary market turnover on the FMDQ Exchange in October 2023 reached ₦21.70 trillion, with CBN Bills, Money Market, and Foreign Exchange transactions dominating, accounting for 80.69% 0per cent of the total turnover. The spot market turnover witnessed a month-on-month decrease of 4.02 per cent, influenced by fluctuations in Money Market and Foreign Exchange turnovers.
These developments underscore the dynamic nature of Nigeria’s financial market, with investors eyeing the government bonds for stable returns amid changing market conditions.
