Bullish sentiment returned to the domestic bond market as mild buy interest pushed average yield downward marginally. Consequently, average FGN bond yield dipped by 2 bps W-o-W to 18.80% from 18.82% that was recorded in the prior week.
Conversely, despite the sell-offs witnessed across most maturities, the substantial buy interest at the mid-end pushed the secondary market to a bullish close. Specifically, the substantial decline in the yield on the APR-2032 and the JUN-2033 instruments by 155 bps each bolstered the positive close.
At the PMA, the Debt Management Office (“DMO”) offered a total of N450.00bn across the APR-2029, FEB-2031, and JUN-2033 maturities. The auction witnessed mixed demand as only one maturity on offer was oversubscribed. Consequently, the subscription ratio closed at 0.68x (₦450.0bn offer vs. ₦305.26bn subscription), while the stop rates closed at 19.64%, 20.19%, and 21.50% sequentially.
This week, we expect some bullish momentum as the liquidity from the PMA flows into the secondary market as investors position themselves to fill unallotted bids. We therefore advise investors to take advantage of maturities with relatively attractive yields across the curve.
Afrinvest
