This is to notify you of the Central Bank of Nigeria’s Primary Auction of the Federal Government of Nigeria Treasury Bills on Wednesday, 17 May 2017. Total volume on offer is N111billion – broken down into N 32billion for 91 days tenor, N23billion for 182 days tenor, and N56billion for 364 days tenor.
We do believe Treasury bill is an asset class an informed investor should hold in a portfolio.
A. Our Views on Treasury Bills:
Summary of benefits of an investment in Treasury Bills include:
a) Credit Risk-Free. Both principal and interest are guaranteed by the full faith of the Federal Government of Nigeria, hence default free
b) Tax Free. All income are free from federal, state, and local taxes
c) Liquid. Treasury bills are very liquid and would be re-discounted if the investor is in need of cash, and does not wish to hold to maturity
d) High Return. Currently amongst the highest yielding investments in Nigerian markets today, and highest on a risk-adjusted basis
e) Collateral Value. Treasury bills can be used as collateral for loans in banks and other financial institutions
B. Our Expectations - 17 May 2017
Our expectations for the NTB auction on Wednesday, 17 May 2017, are for the stop rates to be around the same levels as they were at the last auction on 03 May 2017. Our expectations are for the stop rates within the range below:
OFFER AMOUNT (NGN)
LAST STOP RATE
EXPECTED STOP RATE RANGE
13.50% - 13.75%
17.15% - 17.40%
18.65% - 18.90%
reporting for easykobo.com on Wednesday, May 17 2017 from Lagos, Nigeria
Source - AIICO
Note - all opinions, views, forecasts and targets in this article are those of analysts at AIICO
Capital Ltd. Easykobo does not endorse or oppose any views made in this article.
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