SAT 05 FEB, 2022-theGBJournal- The Treasury bonds secondary market ended on a mixed note, albeit with a bullish bias, as investors traded cautiously considering the uncertainty of FI yields direction.
A total of 61,682 units valued at N63.308 million were traded this week in 8 deals compared with a total of 57,971 units valued at N59.256 million transacted last week in 15 deals.
Consequently, the average yield pared by 1bp to 11.6%. Across the benchmark curve, the average yield expanded at the short (+9bps) end following the sell-off of MAR-2025 (+22bps) bond but declined at the mid (-6bps) and long (-1bp) segments as investors demanded the NOV-2029 (-12bps) and MAR-2050 (-10bps) bonds, respectively.
In the absence of significant inflows to support demand, we expect bond yields to oscillate around current levels in the coming week.
Nonetheless, 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.
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