Investors Weigh REITs Against OMO Bills in Nigeria

The Central Bank of Nigeria has reopened Open Market Operations (OMO) securities to individuals, companies, and non-bank financial institutions through deposit money banks, allowing greater access to high fixed-income yields. At the last auction, investors submitted N4.93 trillion for N600 billion of OMO bills, clearing around the 20% mark.

Treasury Bills also offer attractive returns, with the 364-day stop rate rising to 17.59% at the August auction, where N4.19 trillion was subscribed for N500 billion on offer. This situation prompts investors to reconsider the risk of equities, especially after the NGX All-Share Index fell for 10 consecutive sessions following a record high on August 10.

While many stocks may struggle to compete with OMO yields, some income-oriented listed funds, such as REITs and infrastructure funds, offer high distributions and capital appreciation potential. MREIF is trading at N100, CNIF has gained 54.3%, UH REIT has risen 35%, and UPDC REIT has gained 101.45% this year.