OMO Bills Account for 72% of N36.5bn Fixed-income Trades in August

Nume Ekeghe        

Open Market Operation (OMO) bills took the lion’s share of activity in Nigeria’s fixed-income market in August, accounting for about 72 per cent of the N36.52 billion face value traded across the market during the month.

The latest Fixed Income Dashboard on the Central Bank of Nigeria (CBN) website showed that 9,187 trades were recorded between August 1 and 31, involving 29 participants across OMO bills, Treasury bills, FGN Bonds and Sukuk.

OMO bills led the market by a wide margin, recording 4,032 trades with a face value of N26.19 billion. The figure represented 71.7 per cent of the total N36.52 billion traded during the period.

Treasury bills came next with 2,666 trades valued at N5.69 billion, while FGN Bonds recorded 2,471 trades worth N4.59 billion. Sukuk, meanwhile, accounted for only 18 trades valued at N40.11 million.

The distribution of activity shows the extent to which OMO bills drove the market in August. Their N26.19 billion face value was more than four times the N5.69 billion recorded in Treasury bills and about 5.7 times the N4.59 billion traded in FGN Bonds.

Interestingly, while OMO bills had the largest value, Treasury bills and FGN Bonds together generated more trades. The two instruments recorded a combined 5,137 transactions, compared with 4,032 for OMO bills.

OMO bills also attracted 28 participants, the same number recorded for Treasury bills. FGN Bonds had 26 participants, while only five participants traded Sukuk during the period.

The market’s yield picture remained notably higher for OMO bills. The dashboard put the closing OMO yield at 22.67 per cent, against a weighted average yield of 20.96 per cent for the tenor displayed.

FGN Bond yields, on the other hand, were mostly within the 16 per cent to 17 per cent range across the displayed tenors. Closing yields included 17.17 per cent, 16.23 per cent, 17.15 per cent, 16.41 per cent, 17.15 per cent, 17.25 per cent, 17.10 per cent and 17.30 per cent.

The dashboard also showed weighted average FGN Bond yields of 17.10 per cent and 17.23 per cent among the displayed tenors.

With OMO bills accounting for nearly three-quarters of the month’s traded value, August’s fixed-income activity was clearly skewed towards the short-term instrument, even as Treasury bills and FGN Bonds maintained a sizeable share of transaction volumes.