SAT. 14 JANUARY, 2023-theGBJournal| Proceedings in the FGN bonds secondary market turned bearish this week, following selloffs of instruments across the curve as investors still await clarity on the FGN’s intended borrowing for Q1-23.
The average yield across all instruments expanded by 11bps to 12.8%. Across the benchmark curve, the average yield dipped at the short (-4bps) end as investors demanded the APR-2032 (-87bps) bond, but expanded at the mid (+9bps), and long (+28bps) segments following profit-taking on the APR-2032 (+16bps) and MAR-2050 (+40bps) bonds, respectively.
We expect the publication of the FGN bond issuance calendar for Q1-23 to influence sentiments in the Treasury bonds secondary market in the short term.
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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