CBN Sells N1.51trn OMO Bills, Rates Settle at Over 24%
The Central Bank of Nigeria (CBN) allotted N1.51 trillion to foreign portfolio investors and local deposit money banks—the eligible market participants—at the open market operation (OMO) bills auction on Monday.
The CBN opened N600 billion OMO bills for subscription across mid tenors as part of an effort to regulate liquidity levels in the financial system. Investor subscription, however, came in stronger, reflecting sustained appetite for the naira assets in a high-yield, fixed interest income environment.
The N600 billion OMO bills floated was split into N300 billion across a 106- and 232-day paper. Investors staked N1.53 trillion to purchase the OMO bill asset, which translated to bid-to-offer ratio of 2.55x, investment banking firm said in separate market updates
Eventually, bills worth N1.51 trillion were allotted, resulting in a bid-to-cover ratio of 1.01x, CardinalStone Securities Limited mentioned in its investors’ note.
According to investment banking firm AIICO Capital Limited, a stop rate of 24.20% was offered on 106- day OMO bills, while 232-day bills was priced at 24.64%. Last week, the average yields on OMO bills decreased by 80 basis points (bps), closing at 25.70% on Friday. The short and long segments’ yields decreased significantly.
Yield at the short end dropped by 203 bps, closing at 25.55%, and yield at the long end of the curve fell by 99 bps, closing at 25.38% apiece. The yield at the medium segment increased by 31 bps, closing at 26.66%.
CBN offered N600 billion worth of OMO bills to investors at the primary market across the 104-day and 139-day tenors, and there was an oversubscription of N87.13 billion, signaling sustained interest by investors.
Total sales across both tenors was N482 billion. Stop rates were 23.60% and 24.98%, respectively. For the 106-day and 169-day tenors, the CBN also offered N600 billion, and there was an oversubscription of N546.2 billion. Total sales across both tenors was N1.12 trillion. Stop rates were 23.59% and 24.50%, respectively Ecobank Rises as Enhanced Financial Stability Attracts Investors
