Mop-up expected on N45bn OMO maturities

THERE are high expectations among a herd of market participants that the bears will remain in play this week as the Central Bank of Nigeria (CBN) sustains mop-up activities given expected Open Market Operation (OMO) maturities of N45.0 billion.

Also, there are anticipations that instruments in the African Corporate Eurobonds market would maintain the current bearish trend.

“We expect the local bonds market to extend its bearish performance given weak investor sentiment,” dealers from Afrinvest (West) Africa said in a note to clients.

Meanwhile, following the drive to bridge the 2022 N6.26 trillion budget deficit, the Federal Government, through the Debt Management Office (DMO), in the first five months of 2022 raised a total of N5.58 trillion through Savings Bonds.

In the first five months of 2021, a total of N4.04 trillion was raised through the FGN Saving Bond despite low-yield on interest rate.

The debt office, in 2017, launched FGN Saving Bond for retail investors that guaranteed interest payment and repayment of the principal.

According to the guidelines, retail investors looking to invest in the FGN Saving Bond only need a minimum of N5,000 to invest. Subsequent investment over N5,000 would be in multiples of N1,000. Meaning that investors cannot invest N5,500 or N12,700. It is either N6,000 or N13,000 or N30,000. The maximum amount a single retail investor can invest in the FGN Saving Bond is N50 million.

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