SAT, 17 SEPT, 2022-theGBJournal| This week, bullish sentiments persisted in the FGN bonds secondary market as investors continued to cherry-pick instruments with attractive yields. As a result, the average yield across instruments dipped by 24bps to 12.7%.
Across the benchmark curve, the average yield contracted at the short (-79bps) end following the bargain hunting on the APR-2023 (-383bps) bond, but was unchanged at the mid and long segments.
In the coming week, we expect the outcome of the September 2022 FGN auction holding on Monday (19 September) to influence the sentiments in the Treasury bond secondary market.
At the auction, the DMO will offer instruments worth N225.00 billion through re-openings of the 13.53% FGN MAR 2025, 12.5000% FGN APR 2032 and 16.2499% FGN APR 2037 bonds.
Notwithstanding, we maintain our stance that yields will continue to rise over the short-term given that the FGN’s borrowing plan for 2022FY and expected fiscal deficit point towards an elevated supply.
A total of 15,945 units valued at N16.238 million were traded this week in 15 deals compared with a total of 219,620 units valued at N243.115 million transacted last week 30 deals.
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