Investors Stake N1.45 Trillion on OMO Bills at 24.28% Rate
Investors have staked an impressive ₦1.45 trillion in Nigeria’s Open Market Operation (OMO) bills, underscoring robust demand for fixed-income assets amid soaring inflation and elevated interest rates. The auction, held by the Central Bank of Nigeria (CBN) on Tuesday, drew substantial interest from local deposit money banks (DMBs), foreign portfolio investors (FPIs), and authorised dealers, collectively attracted by the lucrative 24.28% stop rate offered on the long-end tenors.
The CBN initially placed ₦300 billion in OMO bills on the table across standard maturities, responding to recent liquidity surges within Nigeria’s banking system. However, the level of investor interest significantly outpaced the offering, resulting in a bid-to-offer ratio of 4.83x as investors pursued longer-term debt positions amidst the evolving market climate.
In a note to investors, CardinalStone Limited reported that all subscription volume focused on long-term tenors, with no bids placed for short or medium-term options. AIICO Capital Limited noted that, in response, the CBN ultimately issued approximately ₦1.447 trillion in the long-dated bills, while opting not to allocate any of the offered short and medium tenors.
Market participants anticipate further action in the debt market as the CBN prepares to conduct a Nigerian Treasury bill auction on Wednesday, targeting an additional ₦513.43 billion across standard maturities. This secondary auction, expected to sustain the elevated interest seen in OMO offerings, could provide another valuable window for yield-seeking investors to lock in gains in Nigeria’s volatile inflationary landscape.
As the CBN navigates these liquidity management efforts, the sustained appetite for long-dated OMO bills highlights the broader market’s preference for stable returns, even amid high inflation and dynamic financial conditions. Banking Index Rises 3.16% as UBA, Zenith, ACCESS Soar
