Bond Market Investors Raise Position on Short-term Instruments

Bond Market Investors Raise Position on Short-term Instruments

Amidst uncertainties in the economy, investors remained largely bullish in the bond market but with record interest in short-term instruments.

In the week, the domestic bonds market ended on a bullish note as average yield fell 42 basis points (bps) to 7.5% following buying interest on all trading days.

Lower interest rate environment has reduced yields or interest payment on fixed income market instrument.

Though, investors remained largely positive, the situation that slew of analysts attribute to lack of alternative investment windows.

It cost money to keep money, but inflation rate has outrun yield in the fixed income market generally.

The bullish sentiment was driven by demand from investors seeking to take position ahead of the bond coupon payment amounting to ₦191.7 billion in the following weeks.Bond Market Investors Raise Position on Short-term Instruments

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Afrinvest in a note said the short-term instrument recorded the most buying interest as average yield declined 1.2% week on week.

Trailing, average yield on the long and medium-term instruments dipped 22bps and 11bps week on week respectively.

Across the Sub-Saharan Africa (SSA) Eurobonds space, Afrinvest also observed that a sell pressures dragged performance and average yield rose 15bps to 8.3%.

Meanwhile, the NIGERIAN 2027, GHANA 2022 and GABON 2024 instruments recorded the most sell-offs as the respective yields increased 33 basis bps.

Read Also: Bonds: Yields across Benchmark Tenors Drop as Inflation hits 28-month high

Trailing, yields on the NIGERIAN 2038 and 2047 instruments rose 32bps and 30bps week on week respectively.

“At the African Corporate Eurobonds market under our coverage, performance was positive as average yield dipped 14bps w/w to 4.5%”, Afrinvest stated.

The SIBANYE GOLD 2023 and GROWTHPOINT PROPERTIES LIMITED 2023 instruments posted a bullish performance as yields declined 220bps and 34bps respectively.

“In the coming week, we expect to see a bullish performance in the domestic market as investors reinvest inflows from bond coupon”, Afrinvest informed.

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Bond Market Investors Raise Position on Short-term Instruments