SAT, SEPT 16 2023-theGBJournal |The FGN Bonds market commenced the week with subdued trading, marked by heightened anticipation surrounding the results of Monday’s FGN bonds auction.
The Debt Management Office (DMO) offered N360 billion worth of bonds across four different tenors (29s, 33s, 38s, and 53s) at the auction.
However, the total subscription amounted to only N290.99 billion, falling short of the offering, and the allotted amount was N251.49 billion.
Notably, stop rates saw an increase compared to the previous auction levels, settling at 14.50%, 15.45%, 15.55%, and 16.25% for the respective tenors, in contrast to the prior rates of 13.85%, 15.00%, 15.20%, and 15.85%.
Taking a cue from the auction and amid tight liquidity conditions in the financial system, yields moved higher across the yield curve.
However, by the week’s end, there was increased interest in long-tenured bonds, driven by anticipation of bond coupon payments next week, acted as a stabilizing factor, resulting in the average benchmark yield closing the week at 14.65%, reflecting a 34 bps increase week-on-week.
We anticipate improved demand driven by bond coupon payments expected next week.
The FGN Eurobonds traded mixed sentiments in the week under review as average benchmark yield closed flat at 11.10%.
This could be traced to the released reports during the week that strengthened market expectation of a pause in FEDs rate for September.
We anticipate cautious activities next week market awaits the FOMC meeting on Wednesday.
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