Yields Drive OMO Participation as Investors trade N8.07tr in 5days

Attractive yields continued to drive investors interest in Open Market Operations as they staked N5.99 trillion last week, accounting for 74 per cent of the total fixed income market trade in the five days trading of last week.

OMO bills closed the period at 19.57 per cent, with a weighted average yield of 19.74 per cent. Treasury bills recorded a closing yield of 15.76 per cent, while the weighted average stood at 19.83 per cent.

At the end of last week, the fixed-income market recorded N8.07 trillion in traded face value OMO bills accounting for the bulk of activity as investors maintained strong demand for short-term government securities.

The market recorded 2,097 trades involving 27 participants during the period, with OMO bills alone accounting for N5.99 trillion, representing about 74 per cent of total traded value. The instrument also recorded the highest number of transactions at 1,045 trades.

FGN bonds followed with N1.19 trillion traded across 687 transactions, while Treasury bills recorded N877.76 billion from 354 trades. Sukuk activity remained limited at N8.35 billion across 11 transactions.

The composition of trading points to continued preference for shorter-duration instruments. OMO bills accounted for substantially more value than FGN bonds and Treasury bills combined, despite the latter two markets generating more than 1,000 transactions between them.

OMO bills attracted 26 participants, compared with 22 for Treasury bills and 21 for FGN bonds, indicating that demand for government securities remained relatively broad-based rather than being confined to a small group of investors.

Across the FGN bond curve, yields remained predominantly in the mid-16 per cent range, with several maturities trading around 16.50 per cent to 16.90 per cent, before moderating towards 15.73 per cent, 15.42 per cent and 14.90 per cent at longer maturities.