SAT. 26 NOV, 2022-theGBJournal| The Treasury bonds secondary market closed on a mixed note, albeit with a bearish bias, as the average yield increased slightly by 1bp to 14.4%.
A total of 21,215 units valued at N22.462 million were traded this week in 10 deals compared with a total of 58,708 units valued at N58.646 million transacted last week in 21 deals.
This week’s performance was influenced by investors re-pricing bonds upwards in reaction to the 100bps hike in the MPR amid buying interests on the FGN NOV 2029 bond specifically from banks and institutional investors.
Accordingly, the average yield inched upwards by 1bp w/w to 14.4%. Across the benchmark curve, the average yield increased at the short (+5bps), and long (+6bps) ends, as investors took profit off the APR-2023 (+99bps) and JAN-2042 (+9bps) bonds, respectively.
Conversely, the average yield contracted at the mid (-8bps) segment following bargain hunting on the NOV-2029 (-13bps) bond.
In the medium term, we maintain our view of an uptick in bond yields, as both the FGN’s borrowing plan for 2022FY and the expected fiscal deficit point towards an elevated supply.
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