SAT 07 AUG, 2021-theGBJournal- Trading in the Treasury bonds secondary market sustained its bullish run as the average yield contracted by 13bps to 11.9%.
A total of 702,021 units valued at N709.343 million were traded this week in 17 deals compared with a total of 29,324 units valued at N30.799 million transacted last week in 12 deals, NGX data shows.
We note that there was improved demand in this space as investors continued to select attractive offers across the different segments of the curve. Across the benchmark curve, the average yield declined at the short (-11bps), mid (-18bps) and long (-5bps) ends following investors’ interest in the JAN-2022 (-28bps), NOV-2029 (-27bps) and MAR-2050 (-13bps) bonds, respectively.
Next week, we still expect lower average yields as investors continue to cherry-pick relatively attractive instruments. In the longer term, we also maintain our view of tempered yields in the second half of the year, given our expectations of limited supply and deliberate efforts by the DMO to reduce borrowing costs for the government.
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