OMO Bills Dominate Fixed Income Market as Investors Trade N6.86trn in 5days

Open Market Operation (OMO) bills emerged as the most traded instrument by value in Nigeria’s fixed income market last week, accounting for N3.36 trillion of the N6.86 trillion total transactions recorded across Treasury bills, Federal Government of Nigeria (FGN) bonds, OMO bills and Sukuk securities, as investors sustained appetite for high-yield government instruments.

Trading data showed that investors executed a total of 2,330 transactions with a combined face value of N6.863 trillion during the review period, underscoring continued confidence in sovereign fixed income assets amid the prevailing high interest rate environment.

The OMO segment recorded 498 deals worth N3.36 trillion, representing nearly half of the total market turnover by value. Despite having fewer transactions than FGN bonds and Treasury bills, the segment posted the largest value of trades, highlighting the dominance of institutional investors executing large-ticket transactions.

FGN bonds remained the most actively traded asset class by transaction volume, with 1,159 deals valued at N1.98 trillion, reflecting continued portfolio adjustments by institutional investors in the secondary market.

Treasury bills followed with 666 trades worth N1.51 trillion, while Sukuk securities recorded the least activity, posting just seven transactions with a total value of N19.73 billion.

Market activity also reflected the sustained attraction of government securities as elevated yields continued to support investor demand.

Treasury bill yields traded within the range of 17.6 per cent and 20.1 per cent during the week, while OMO bill yields remained above 19 per cent, with the shortest-tenor instrument closing at about 21.2 per cent.

Similarly, yields on FGN bonds were largely stable, trading between 15 per cent and 18.4 per cent across most maturities, indicating relatively steady pricing in the secondary market despite the high interest rate environment.

Analysts said the strong turnover in OMO bills suggests that liquidity management remains a major priority for banks, which have continued to channel excess liquidity into Central Bank of Nigeria instruments while meeting reserve requirements and other funding obligations.