By Bukola Idowu, Lagos
The Debt Management Office will today open the FGN Savings Bond auction for the month of June 2017, selling both two and three year papers to retail investors, according to its provisional bond issuance calendar.
The debt office is however yet to issue an offer circular wherein it will state the yields on the two bonds. Last month it had sold two and three year tenured bonds with yields of 13.189 per cent and 14.189 per cents respectively.
Although the yields were higher than the previous FGN Savings bond sales in April, the amount raised form the bond auction continued to decline. Compared to N1.288 billion which it raised though the retail bond in April, the DMO was able to raise N790.85 million.
The April bond auction result was also lower than what it raised at the first leg of the Savings Bond auction in March. The amount raised from the FGN Savings bond declined from N2.068 billion in March to N1.288 billion in April.
Traders say the waning interest in FGN bond is due to liquidity crunch in the banking industry as well as the picking up of activities at the stock market. The bull had returned to the stock market as the Central Bank of Nigeria increased outflow of foreign exchange and also opened up an Investors and Exporters window, which uses a market determined price, allowing foreign investors to move funds in and out of the country easily.
Also, the CBN had consistently sold foreign exchange to meet dollar demand and stabilize the currency. Also it has been selling Treasury Bills and OMO to mop up liquidity at the market. The liquidity at the money market which had been tight eased up last week as overnight lending rates dropped and stabilized to around 11 per cent.