SAT 28 AUG, 2021-theGBJournal- Proceedings in the Treasury bonds secondary market closed the week on a bullish note, as the average yield contracted by 23bps to 11.2%.
A total of 26,861 units valued at N27.503 million were traded in 17 deals compared with a total of 30,877 units valued at N31.842 million transacted last week in 14 deals.
Cordros Research attributes the decline to the improved demand following the sustained improvement in macroeconomic conditions as signalled by the third consecutive quarter of positive growth (Q2-21 GDP: +5.01% y/y vs Q1-21: +0.51% y/y) and further reduced stop rates at the mid-week NTB auction.
Across the benchmark curve, the average yield declined at the short (-32bps), mid (-25bps) and long (-18bps) segments as investors’ interest piqued on the JAN-2026 (-48bps), MAR-2027 (-32bps) and JUL-2034 (-49bps) bonds, respectively.
In the coming week, we maintain our expectations of lower average yields in the face of limited supply and deliberate efforts by the DMO to reduce domestic borrowing costs for the government.
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