The domestic FGN Bonds secondary market opened last week on a subdued note, as cautious sentiment prevailed across most maturities.
Market performance was further influenced by the anticipation of the December FGN Bonds Primary Market Auction (PMA) scheduled for this week. Consequently, the average benchmark yield rose by 65bps W-o-W to settle at 20.72%.
In detail, bearish sentiment dominated all the maturities, with the short -, mid- and long ends rising 73bps, 45bps and 86bps w-o-w respectively. The Mar-2035 saw the most uptick, moving 189bps to settle at 20.15% w-o-w.
Today, Monday, 27-Jan-25, the PMA is expected to draw significant attention as the DMO plans to re-open the 19.30% APR-2029 and 18.50% FEB-2031 instruments, along with the issuance of the new JAN-2035 bond.
The APR-2029 and FEB-2031 instruments have tenors of 4 years, 3 months, and 6 years, 1 month, respectively, while the JAN-2035 bond has a tenor of 10 years. The DMO is offering ₦150bn-₦200bn for each of the instruments, with their original tenors being 5 years, 7 years, and 10 years, respectively.
This week, we (Afrinvest analysts) also expect the outcome of the PMA to set the tone for the market.
