SAT, 12 NOV, 2022-theGBJournal| The FGN bonds secondary market turned bullish this week, as the average yield dipped by 6bps w/w to 14.5%. We attribute this performance to investors cherry-picking attractive bonds in higher-yield environments particularly at the short and mid segments of the naira curve.
Across the curve, the average yield contracted at the short (-15bps) and mid (-13bps) segments following bargain-hunting activities on the JAN-2026 (-35bps) and NOV-2029 (-16bps) bonds, respectively. However, sell-offs were witnessed at the long (+8bps) end as investors sold off the MAR-2036 (+37bps) bond.
We expect the outcome of the FGN auction holding on Monday (14 November) to shape the sentiments in the Treasury bond secondary market next week. At the auction, the DMO will offer instruments worth N225.00 billion through re-openings of the 14.55% FGN APR 2029, 12.50% FGN APR 2032, and 16.2499% FGN APR 2037 bonds.
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