Stock Market Sheds N2.1tn as Investors React to CBN’s Revised Open Market Operation Framework

The Nigerian stock market experienced a significant downturn last week, shedding approximately N2.1 trillion in market capitalization. This decline is attributed to investor reactions to the Central Bank of Nigeria's (CBN) revised Open Market Operations (OMO) framework. The central bank's decision to open OMO market participation to individuals, corporates, and non-bank financial institutions has raised concerns among analysts about potential fund diversion from the equities market to fixed-income instruments, especially given the attractive yields available.

The Nigerian Exchange Limited (NGX) saw its market capitalization drop by 1.33%, from N156.624 trillion to N154.534 trillion. Similarly, the NGX All-Share Index (ASI) fell by 1.35%. This bearish performance was fueled by profit-taking in highly capitalized stocks such as Aradel Holdings Plc, MTN Nigeria Communications Plc, Zenith Bank Plc, and First HoldCo Plc. These companies experienced week-on-week declines ranging from 0.5% to 9.99%.

The CBN's revised OMO framework, announced on August 12, 2026, allows eligible investors to participate in both primary and secondary OMO markets through Deposit Money Banks (DMBs). This move marks a departure from the previous restriction primarily to institutional participants. Since the announcement, the domestic equities market has recorded eight consecutive trading sessions of losses, underscoring the immediate impact of the policy shift on investor sentiment and market dynamics. The central bank's aggressive liquidity management strategies have also coincided with this revised framework.

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OMO participation (primary and secondary markets) shall be open to all eligible investors through Deposit Money Banks (DMBs). Eligible investors include individuals, corporates and non-bank financial institutions. DMBs shall continue to submit bids and settle transactions on behalf of their customers.