The Central Bank of Nigeria’s decision to reopen its Open Market Operations (OMO) securities to individual and corporate investors could increase competition for funds in the Nigerian equities market.
Under a circular issued on August 12, 2026, individuals, companies and non-bank financial institutions can now participate in the primary and secondary OMO markets through Deposit Money Banks.
The policy reverses a restriction introduced in 2019 and comes as investors show strong demand for high-yielding fixed-income instruments.
At the August 12 Treasury Bills auction, investors submitted about N4.4 trillion in bids for N700 billion on offer, with the 364-day bill clearing at 17.59 per cent.
A day later, OMO securities attracted N4.93 trillion in bids against N600 billion initially offered. The CBN allotted about N2.60 trillion, with the 103-day and 138-day OMO bills clearing at 20.39 per cent and 20.01 per cent respectively.
This gives OMO bills a yield advantage of roughly 3.5 to four percentage points over comparable Treasury Bills, potentially making them more attractive to investors seeking relatively low-risk short-term returns.
Analysts, however, said the wider access is unlikely to trigger a broad-based flight from equities.
Isaac Osaro, Head of Investment Research at First Securities Brokers Limited, said OMO would likely become an additional portfolio option rather than a direct substitute for stocks, particularly if yields fall as more investors participate.
He noted that equities could still attract investors where companies offer strong earnings growth, dividends and capital appreciation.
However, higher OMO yields could put pressure on weaker-performing or highly valued stocks, as investors may demand higher potential returns before accepting the additional risks associated with equities.
Analysts also expect the CBN’s liquidity-management strategy and the volume of OMO securities it offers to determine whether yields remain elevated or decline.
The reopening therefore creates a new competitive benchmark for Nigerian equities, making stock selection and companies’ underlying earnings prospects increasingly important to investors.
