Nume Ekeghe
Open Market Operations (OMO) bills accounted for almost half of transactions in Nigeria’s fixed-income market in the first five trading days of November, attracting N3.56 trillion as total turnover across major government securities reached N7.37 trillion.
Figures from the fixed-income dashboard showed that OMO bills recorded 766 trades between November 1 and November 6, making them the most actively traded instruments during the period. Their N3.56 trillion turnover represented 48.3 per cent of the N7.37 trillion traded across the market. The figures point to the continued weight of OMO bills in fixed-income trading, with their turnover significantly ahead of activity in Federal Government of Nigeria (FGN) bonds and Treasury bills.
FGN bonds followed with transactions valued at N2.29 trillion from 702 trades, accounting for 31.1 per cent of total turnover. Treasury bills recorded N1.50 trillion across 421 trades, while Sukuk attracted N13.85 billion from just eight transactions.
Analysis of trading numbers for last week showed that in all, the four security categories recorded 1,897 trades during the six-day period.
The distribution of activity was equally telling. Although OMO bills led in value and number of transactions, Treasury bills also recorded 23 participants, the same as OMO bills. FGN bonds attracted 19 participants, while Sukuk had two.
The dashboard put the total number of participants at 26, suggesting that trading activity across the different instruments was concentrated among a relatively limited pool of market participants.
Beyond the volume of transactions, the yield data showed that returns remained relatively high across several maturities, although longer-dated instruments generally recorded lower closing yields.
On the overall closing yield curve, the shortest tenor recorded 20.08 per cent, before declining to 18.52 per cent at the next maturity and moving largely within the 16 per cent range across several intermediate tenors.
The moderation became more pronounced towards the longer end of the curve, with closing yields falling to 15.41 per cent at the 19-year tenor and 14.59 per cent at 23 years, before settling at 15.01 per cent at 27 years.
A similar pattern was visible in FGN bonds, where closing yields remained around 16 to 17 per cent across much of the intermediate maturities before declining at the longer end. The dashboard showed yields of 15.41 per cent at 19 years, 14.49 per cent at 23 years and 14.86 per cent at 27 years.
For OMO bills, the closing yield declined from 20.08 per cent at the shorter tenor to 16.81 per cent at one year. Treasury bills recorded closing yields of 19.71 per cent and 17.41 per cent across the two maturities displayed.