OMO Bills Dominate Fixed Income Market with N3.36tn Trades, Activity Hits N6.86tn

Nigeria's fixed income market saw robust activity last week, with Open Market Operation (OMO) bills emerging as the dominant instrument, attracting transactions worth N3.36 trillion. This segment accounted for nearly half of the total market turnover, which reached N6.86 trillion across Treasury bills, FGN bonds, OMO bills, and Sukuk.

The sustained demand for high-yield government securities is attributed to the prevailing elevated interest rates. OMO bills attracted the highest turnover by value despite a lower number of trades, indicating the significant involvement of institutional investors in this segment. These larger ticket transactions often outweigh the volumes seen in other asset classes.

FGN bonds were the most actively traded by the number of transactions, with 1,159 deals valued at N1.98 trillion. Treasury bills followed, recording 666 trades totaling N1.51 trillion. Sukuk securities, however, saw limited activity, with only seven trades amounting to N19.73 billion.

Market yields remained broadly high across the sovereign yield curve. Treasury bill yields fluctuated between approximately 17.6 percent and 20.1 percent, while OMO bill yields stayed above 19 percent, with the shortest tenor closing around 21.2 percent. FGN bond yields generally ranged between 15 percent and 18.4 percent, suggesting relatively stable pricing in the secondary market. The strong performance of OMO bills also points to the banking sector's continued focus on liquidity management, deploying excess funds into Central Bank of Nigeria instruments.