SAT 12 FEB, 2022-theGBJournal- Trading in the Treasury bonds secondary market continued with mixed sentiments, albeit with a bullish tilt, following the persistently lower demand as investors remain on the sidelines awaiting further clarity on the direction of fixed income yields.
Consequently, the average yield pared by 3bps to 11.6%. Across the benchmark curve, the average yield declined at the short (-17bps) and long (-2bps) ends following demand for the MAR-2024 (-44bps) and MAR-2035 (-11bps) bonds, respectively but expanded at the mid (+3bps) segment as investors sold off the FEB-2028 (+22bps) bonds.
Next week, we expect the outcome of the bond auction and release of the January 2022 CPI (Cordros Forecast: 15.47%) to shape market sentiments and the direction of yields.
At the auction, the DMO will be offering instruments worth NGN150.00 billion through re-openings of the 12.50% FGN JAN 2026 and 13.00% FGN JAN 2042 bonds. In the medium term, we still expect frontloading of significant borrowings for the year by the FG to result in an uptick in bond yields, as investors demand higher yields in the face of elevated supply.
Twitter-@theGBJournal|Facebook-The Government and Business Journal|email: govandbusinessj@gmail.com|
