SAT, APRIL. 15 2023-theGBJournal | The FGN bonds secondary market sustained its bearish sentiment this week, as investors stayed on the sidelines ahead of this month’s FGN bond primary auction scheduled for Monday, next week.
Accordingly, the average yield advanced by 4bps to 13.7%. Across the benchmark curve, the average yield expanded at the short (+15bps) end following the sell-offs on the JAN-2026 (+60bps) bond but contracted at the long (-1bp) end as investors demand the MAR-2050 (-5bps) bond.
Meanwhile, the average yield was flat at the mid segment. Analysts at Cordros Research expects the result of the April 2023 Treasury bond auction to influence the sentiments in the secondary market in the coming week.
At the auction, the DMO is offering instruments worth N360.00 billion through re-openings of the 13.98% FGN FEB 2028, 12.50% FGN APR 2032, 13.00% FGN JAN 2042 and 12.98% FGN MAR 2050 bonds.
Overall, a total of 5,200 units valued at N5.115 million were traded this week in 18 deals compared with a total of 26,065 units valued at N24.865 million transacted last week in 25 deals.
Over the medium term, we expect an uptick in bond yields as we believe investors will demand higher yields, which will be driven by significant borrowings expected from the FG for the year.
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