SAT AUG 03 2024-theGBJournal|The FGN bonds secondary market were bearish throughout the week, as the average yield across instruments expanded 32bps Friday to close the week at 19.8%.
Across the benchmark curve, the average yield increased at the short (+33bps), mid (+11bps) and long (+22bps) segments, due to sell pressures on the APR-2029 (+121bps), JUL-2030 (+39bps) and JUN-2038 (+97bps) bonds, respectively.
In the near term, we anticipate local participants in the Treasury bonds secondary market will continue to reprice yields higher to reflect the elevated benchmark interest rate and significant supply profile due to expected issuances.
Meanwhile, sentiments in the Treasury bills secondary market remained bearish, as the average yield across all instruments expanded by 28bps to 25.4%.
Across the market segments, the average yield inched higher by 25bps to 25.5% in the NTB segment and advanced by 32bps to 25.3% in the OMO segment.
Midweek, the CBN offered N150.00 billion worth of OMO bills to auction participants, which received a subscription of N86.50 billion (bid-to-offer: 0.6x | range: 23.00% – 26.89%). Owing to the soft demand, the auction closed with no allotments made, just as witnessed at the previous OMO auction.
Next week, yields in the Treasury bills secondary market is expected to maintain its northward movement as we envisage that foreign players will continue to exit their holdings in lieu of the unstable naira.
In addition, the DMO is scheduled to hold an NTB PMA next Wednesday (07 August) where it set to rollover N216.09 billion worth of maturities.
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