It generated N616.71 billion from the FGN Bonds and N3.02 billion from the Savings Bond which are targeted at retail investors.
The amount from the Savings Bond between January and July almost doubled of what the DMO raised between January and September last year. Last year, the agency realised N1.89 billion from the Savings Bond in the first eight months of the year.
Retail investors’ interest was more in the three-year Savings Bond where they staked N2.38 billion compared to N641.07 million which investors put into the two-year Savings Bond.
Despite the general elections held earlier in the year, both retail and institutional investors’ appetite for the fixed income government issued papers did not wane but fluctuated alongside the rates at which they were issued.
The amount generated from the FGN Bond was low in March when the elections were held because only N29.35 billion was raised. Activities in that market, however, picked up in April. The highest amount received from the monthly bond auction was in February when investors staked N150 billion.
Longer tenored bonds, however, remained the toast of investors. Last week, the DMO held the first monthly bond auction for the third quarter of 2019 offering a total of N145 billion.
The offer comprised N40 billion of the April 2023 paper, N50 billion of the April 2029 bond and N55 billion of the April 2049 which were offered at stop rates of 13.4, 13.6 and 14.1 per cents respectively.
The rates were lower relative to June 2019 auction but consistent with the current low yield in the market. The market stop rates were lower than the yields of similar bonds in the secondary market, signalling sales at a higher price except for the April instrument that was auctioned at a higher rate.
Nonetheless, the auction was oversubscribed as bid-to-cover ratio stood at 2.1x (N301.0billion bid against N145.0billion offered). From the result, total allotment on competitive bids (N86.8billion) and non-competitive bids (N58.2billion) was exactly the same as the amount offered. This differs from the norm where amount allotted exceeds the amount offered and consequently, leads to high unsuccessful bids in the auction.