SAT. 28 JANUARY, 2023-theGBJournal| Activities in the Treasury bonds secondary market turned bullish this week, as inflows from FGN bond coupon payments spurred investors to cherry-pick bonds with attractive yields across the curve.
As a result, the average yield contracted by 31bps, w/w, to 13.1%. Based on the sentiments mentioned above, bargain-hunting was witnessed at the short (-101bps) and long (-1bp) ends of the benchmark curve, following demand for the MAR-2024 (-280bps) and MAR-2050 (-7bps) bonds, respectively. Meanwhile, the average yield was flat at the mid segment.
In the coming week, we expect the result of this year’s first FGN bond primary auction scheduled to hold on Monday (30 January) to influence the sentiments in the secondary market.
At the auction, the DMO is offering instruments worth N225.00 billion through re-openings of the 13.98% FGN FEB 2028, 12.50% FGN APR 2032, 16.25% FGN APR 2037, and 14.80% FGN APR 2049 bonds.
Cordros Research analysts says they expect the frontloading of significant borrowings for the year by the FG to result in an uptick in bond yields in the medium term, as investors demand higher yields in the face of elevated supply.
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