Fixed-income Market: Investors Trade N29.4trn In July

Open Market Operation (OMO) Bills remained the dominant instrument in Nigeria’s fixed-income market in July 2026, accounting for the largest share of transactions by value, as overall market activity strengthened compared with the previous month.

Data from the Fixed Income Dashboard showed that total face value traded across OMO Bills, Treasury Bills, Federal Government (FGN) Bonds, and Sukuk rose to N29.36 trillion in July from N21.59 trillion recorded in June, representing a month-on-month increase of about 36 per cent.

The increase in market activity was driven largely by renewed investor appetite for OMO Bills, which recorded transactions valued at N16.44 trillion in July, up from N11.99 trillion in June.

The number of OMO Bills trades also rose to 2,809 in July from 2,201 in June, although the number of market participants declined to 25 from 30.

Treasury Bills also recorded stronger activity during the review period. Transactions climbed to N6.98 trillion in July from N4.18 trillion in June, while the number of trades increased to 3,700, compared with 3,083 in the preceding month. Market participants eased slightly to 30 from 31.

Similarly, trading in FGN Bonds improved moderately as transaction value increased to N5.87 trillion in July from N5.33 trillion in June. The number of trades rose to 3,343 from 3,152, although participants declined to 24 from 27.

Sukuk activity, however, remained subdued. The instrument recorded just 23 trades in both months, with transaction value slipping to N69.11 million in July from N86.05 million in June. The number of participants remained unchanged at six.

Overall, the market recorded 9,875 trades in July, representing a 16.6 per cent increase from 8,469 trades executed in June, while the number of active participants stood at 31, unchanged from the previous month.

On the yield front, OMO Bills remained the highest-yielding instrument. The one-year OMO yield edged up to 21.05 per cent in July from 20.32 per cent in June, while the spot OMO yield moderated slightly to 20.47 per cent from 21.10 per cent.

Treasury Bills yields also firmed, with the one-year yield rising marginally to 20.91 per cent in July from 20.88 per cent in June. The shorter tenor yield improved to 17.62 per cent from 16.77 per cent, reflecting sustained investor demand amid elevated interest rates.

Across the FGN bond curve, yields remained broadly stable despite slight movements across maturities, with longer-dated securities continuing to trade around the mid-15 to 16 per cent range, suggesting investors maintained a preference for government debt instruments despite changing market conditions.

Meanwhile the Treasury bills secondary market last week traded on a bullish note as the average yield across all instruments contracted by 14bps to 19.2 per cent. This came as unmet NTB PMA bids filtered into the secondary market.

By segment, average yield in the NTB and OMO secondary markets contracted by 4bps and 7bps to 18.2 per cent and 21.3 per cent, respectively. At Wednesday’s NTB auction, the DMO offered N700.00 billion across tenors, with total demand reaching N3.62 trillion, with the DMO ultimately allotting NGN1.25 trillion.

Stop rates contracted by 31bps to 17.35 per cent for the 364-day tenor, while the 91-day and 182-day tenors remained unchanged at 16.30 per cent and 16.50 per cent, respectively. The CBN had last week offered N600.00 billion across tenors, with total demand reaching N3.48 trillion and the CBN allotting N3.48 trillion. Stop rates settled at 20.60 per cent, 20.29 per cent and 20.15 per cent for the 91-, 119- and 133-day tenors, respectively.

This week, the Treasury bills secondary market is expected to trade on a bullish note, buoyed by resilient local demand amid the robust system liquidity.

The OVN rate last week expanded by 2bps week on week to 22.1 per cent as OMO and net NTB PMA debits offset inflows from OMO maturities.

Consequently, average system liquidity moderated to a net long position of N3.42 trillion, down from N3.51 trillion in the previous week.

In the absence of any liquidity management measures by the CBN, traders say they expect system liquidity to remain strong, supported by inflow of N2.45 trillion from OMO maturities.