CBN reopens OMO to individuals, offering ~20% yields vs 16% Treasury Bills
CBN’s August 12, 2026 circular reopens Open Market Operations (OMO) securities to individuals, companies and non-bank financial institutions through Deposit Money Banks, reversing a 2019 restriction. Recent auctions show OMO bills yielding around 20%—the 103-day bill cleared at 20.39% and the 138-day at 20.01%—while Treasury Bills of similar tenors yielded 16.30‑17.59%, giving OMO a 3.5‑4 percentage‑point premium. This gives domestic investors a new low‑risk, high‑return option for short‑term funds. Analysts say broader participation could push OMO yields lower, but the CBN can offset this by issuing more volume to absorb excess liquidity. Regarding the Nigerian Exchange (NGX), experts do not expect a mass exit from equities; instead, higher OMO yields may raise the hurdle rate for stocks. Investors earning ~20% from low‑risk OMO will only take equity risk if the expected return is sufficiently higher, making strong earnings growth, dividends and price appreciation more important. Weaker‑performing or richly valued stocks may struggle to justify the extra risk. Consequently, stock selection on the NGX is likely to become more critical as investors weigh OMO’s attractive return against equity risk.