The Central Bank of Nigeria, CBN, has recorded overwhelming demand for its latest Open Market Operations, OMO, instruments, with investors submitting more than N8 trillion in bids as institutional appetite for high-yielding fixed-income securities remains strong.
Investors combined subscription, according to CBN data, rose to N8.62 trillion in subscriptions across four OMO auctions conducted on August last week by the apex bank, over 300 percent higher than the N2 trillion initially offered by the government-controlled financial institution.
The strong reaction from investors enabled the CBN to allot N4.72 trillion, withdrawing the funds from the banking system as part of the efforts of the bank to mop up excess liquidity from the system.
The 132-day tenured instrument offered on last week attracted the largest subscription, with investors submitting N3.48 trillion against the amount offered. The CBN allotted N2.18 trillion at a clearing rate of 19.65 per cent.
The 152-day instrument issued the following day also generated strong interest, attracting N3.29 trillion in subscriptions. The apex bank allotted N1.77 trillion at a clearing rate of 19.32 per cent.
The 97-day instrument attracted N783.49 billion in subscriptions, against N500 billion offered, with N613 billion allotted at 19.90 per cent.
Similarly, the 96-day instrument received N1.07 trillion in bids, although the CBN allotted N160.46 billion at 19.85 per cent.
The huge oversubscription, analysts insist, is an indication that investors are positives to the apex bank high-yield instruments.
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