By Babajide Komolafe

Government securities last week recorded oversubscription of 152 per cent, reflecting surplus of money in the interbank money market.

Results of trading in government securities for the week showed that the total public subscription to the N140 billion worth of treasury bills(TBs) on offer stood at N354.599 billion, indicating oversubscription of N214.549 billion. The Central Bank of Nigeria, however, sold N139.715 billion.

At the primary market where new TBs are issued, N70 billion TBs were on offer while total public subscription stood at N161.92 billion. At the secondary market where existing TBs are traded, N70 billion TBs were on offer while public subscription stood at N192.569 billion.

Details of the primary market trading show that the three-year TBs attracted N65.94 billion subscription as against N30 billion on offer. The range of bids was from 6.0 to 12.99 per cent while the stop rate was 10.2499 per cent.

The five-year TBs attracted N46.32 billion as against N15 billion on offer. Range of bids rate was from 9.0 to 14.04 per cent while the stop rate was 10.7 per cent.

The ten-year TBs attracted subscription of N45.7 billion as against N25 billion on offer. Bid rates ranged from 9.94 to 13.5 per cent while the stop rate stood at 11.4989 per cent.

At the secondary market, the 161 days bills attracted N47.855 billion subscription as against N20 billion on offer. Bid rates ranged from 6.9 to 9.249 per cent while the stop rate was 7.4389 per cent. The 203 days bills attracted N61.75 billion subscription as against N20 billion on offer.

Bid rates ranged from 7.0 to 9.249 per cent while the stop rate was 7.741 per cent. The 322 days bills attracted N62.963 billion subscription as against N30 billion offered. Bid rates ranged from 7.5575 to 10.01 per cent while the stop rate stood at 8.8997 per cent.

The oversubcription recorded by government securities was occasioned by increased market liquidity (funds) buoyed by N270 billion statutory allocation funds that hit the market last week.

Vanguard investigation reveals that the amount of funds in the interbank money market rose by more than 100 per cent to N419.42 billion on Friday from an opening figure of N176.30 billion on Monday.

The surfeit of funds in the market caused cost of funds  to decline on the average by 133 basis points during the week. According to data from Financial Market Dealers Association (FMDA), Call lending dropped to 7.79 on Friday from 9.45 per cent the previous week. 7-Day lending and 30-Day lending also declined to 8.5 and 10.13 per cent from 10.125 and 11.833 per cent respectively.

This trend is likely to continue this week as the excess liquidity in the market is expected to persist this week.