The Nigerian stock market lost about N2.1 trillion in market capitalisation last week as investors reacted to the Central Bank of Nigeria’s (CBN) revised Open Market Operations (OMO) framework, which opened participation in the market to individuals, corporates and non-bank financial institutions.
Specifically, the market capitalisation of the Nigerian Exchange Limited (NGX), which opened the week at N156.624 trillion, declined by N2.09 trillion, or 1.33 per cent, to close at N154.534 trillion.
Similarly, the NGX All-Share Index (ASI) fell by 3,268.04 points, or 1.35 per cent, from 242,619.20 points at the beginning of the week to 239,351.16 points at the close of trading.
The bearish performance was driven largely by profit-taking in some highly capitalised stocks, including Aradel Holdings Plc, MTN Nigeria Communications Plc, Zenith Bank Plc and First HoldCo Plc.
Aradel Holdings declined by 9.99 per cent week-on-week to close at N1,374.20 per share, while MTN Nigeria fell by 3.2 per cent to N779 per share.
First HoldCo dropped by 7.2 per cent to N129.95 per share, while Zenith Bank declined by 0.5 per cent to N122 per share. Guaranty Trust Holding Company Plc (GTCO) also depreciated by 1.2 per cent to close at N127 per share.
Similarly, Unilever Nigeria Plc shed 3.6 per cent to close at N114 per share, while Stanbic IBTC Holdings Plc declined by 3.2 per cent to N156.10 per share.
The losses came against the backdrop of the CBN’s decision to widen access to its OMO market, potentially increasing competition between equities and high-yielding fixed-income instruments for investors’ funds.
The Acting Director, Financial Markets Department of the CBN, Okey Umeano, announced in a circular dated August 12, 2026, that participation in both the primary and secondary OMO markets would be open to all eligible investors through Deposit Money Banks (DMBs).
“OMO participation (primary and secondary markets) shall be open to all eligible investors through Deposit Money Banks (DMBs).
“Eligible investors include individuals, corporates and non-bank financial institutions. DMBs shall continue to submit bids and settle transactions on behalf of their customers,” the circular stated.
With OMO bills now accessible to individuals and other eligible investors through banks, rather than being largely restricted to institutional market participants, analysts believe the policy could divert some funds from equities to the fixed-income market, particularly given the attractive yields on offer.
Since the policy was announced on August 12, the domestic equities market has recorded eight consecutive trading sessions of losses.
Market capitalisation, which stood at N157.494 trillion at the close of trading on August 12, declined by N2.96 trillion, or 1.9 per cent, to N154.534 trillion on August 21.
The revised OMO framework coincided with the apex bank’s aggressive liquidity management.
On August 13, the CBN offered N600 billion worth of OMO bills, with stop rates reaching 20.39 per cent. The 103-day and 138-day instruments attracted total subscriptions of N4.9 trillion, while successful bids amounted to N2.6 trillion.
Analysts tracking developments in the fixed-income market expect elevated OMO yields to gradually filter through to deposit rates as banks compete to retain funds that could otherwise migrate to higher-yielding instruments.
Over time, the development could also encourage a gradual convergence between Treasury Bill and OMO yields, narrowing the roughly 400-basis-point gap currently separating instruments with comparable tenors.
The latest auction formed part of one of the CBN’s most aggressive liquidity sterilisation exercises this year, coming shortly after the apex bank injected a net N5.21 trillion into the banking system, including a single N2.48 trillion OMO repayment on August 11.
It also followed a combined N4.7 trillion mopped up through OMO auctions on August 3 and 4, while more than N7 trillion was absorbed through similar auctions in July alone.
The sustained demand recorded at successive auctions, despite the substantial liquidity already withdrawn from the financial system, suggests that liquidity conditions remain robust enough to support continued participation in OMO instruments.
With OMO stop rates at about 20.4 per cent, significantly above yields on comparable Treasury Bills, the instrument has emerged as an increasingly attractive risk-free investment option.
Looking ahead, Cordros Research said it expected sentiment in the equities market to remain subdued in the near term, particularly in the absence of fresh catalysts.
“We expect market sentiment to remain cautious in the absence of clear near-term catalysts.
“In addition, the CBN’s revised OMO framework could temper market participation, as attractive short-term fixed-income yields may continue to compete with equities for investor flows,” Cordros stated.
Kayode Tokede
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