SAT 23 APRIL, 2022-theGBJournal | The Treasury bonds secondary market closed this week on a bearish note, as demand for FGN bonds remained low amid investors positioning for next week’s PMA. Consequently, the average yield increased 11bps w/w to 11.2%.
Across the benchmark curve, the average yield increased at the short (+25bps), mid (+12bps) and long (+5bps) ends, as investors took profit off the APR-2023 (+102bps), FEB-2028 (+40bps), and APR-2037 (+25bps) bonds, respectively.
Next week, we expect the outcome of the April 2022 FGN bond auction scheduled to hold on Monday (25th April) to influence the direction of yields in the secondary market.
At the auction, the DMO is offering instruments worth NGN225.00 billion through a new issue of the FGN APR 2032 bond and re-openings of the 13.53% FGN MAR 2025 and 13.00% FGN JAN 2042 bonds.
In the medium term, we maintain our view of an uptick in bond yields, as the FGN’s borrowing plan (Q2-22: NGN675.00 billion) points towards an elevated supply.
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