Investors Take Profit on Nigerian OMO, Treasury Bills
OMO Bills Yield rose by 76 basis points (bps) as the market experienced significant sell pressures in the absence of fresh auction sales by the Central Bank of Nigeria (CBN).
The market was thrown into a selling mood following the disinflation reversal as the statistic office adjusted to the global standard, causing heated arguments across BroadStreet.
Inflation rose to 15.15%, still tracking below the return on naira assets, with analysts saying the monetary easing journey might be impacted ahead of the CBN’s policy committee meeting.
Hence, activities across the OMO and Treasury bills were adjusted, with short sellers taking quick profit ahead of anticipated open market operation and Treasury bill sales in the new week.
The selloffs mirrored negative investors’ sentiment and uncertainties about spot rates outlook amidst a flood of liquidity in the money market.
The market witnessed about N811 billion in inflows from OMO repayment, but the short-term investment securities was not refinanced with new issuance, boosting liquidity level in the financial system.
Reflecting the absence of funding pressure, the financial system liquidity strengthened, closing at N2.11 trillion on Friday from N1.42 trillion, supported by N810.98 billion from OMO and Treasury bill maturities.
Due to sell pressure, the average yields on OMO bills rose by 76 bps week on week to 22.43%. Yield pressures were concentrated at the short (+67 bps) and mid (+107 bps) tenors, while the long end of the curve saw modest demand, resulting in a 16 bps yield compression.
In the secondary Treasury bills market, the average yield increased by 11 bps week-on-week to 18.13% p.a., indicating a broadly bearish market tone amid selloffs across the curve.
The market expects an inflow of ₦1.31 trillion from 20-Jan-2026 and ₦725.19 billion in treasury bill maturities, as against an expected outflow of ₦1.15 trillion from the midweek auction. #Investors Take Profit on Nigerian OMO, Treasury Bills#
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