Market Wrap: Domestic Bond Market Remains Downbeat
As with other gilt-edged securities, the domestic bond market remains downbeat, ended the week with a poor performance.
Market data shows that average yield on the bond instrument rose seventeen 17 basis points (bps) week on week to 6.6% amidst rising inflation rate.
In a note, Afrinvest, a leading investment firm headquarter in Lagos explained that yield declined marginally on Monday (1bp) and Friday (2bps) but increase in yield from Tuesday through Thursday dragged performance.
Across tenors, Afrinvest analysts said the short-term bond saw the most demand as yield dropped 13 bps.
Meanwhile, yield on medium and long-term bonds climbed 8 bps and 48 bps week on week respectively.
Then, across the Sub-Saharan African (SSA) Eurobonds space, demand remained weak leading to a bearish outing as average yield rose 24 bps to 7.7%.
However, the Ghana and Zambia 2022 instruments saw the most sell-offs as yield rose 281 bps and 195 bps week on week respectively.
Conversely, yield on the Nigerian 2021 and Ghanaian 2023 instruments fell 530 bps and 4 bps week on week respectively.
Afrinvest stated that performance at the African Corporate Eurobonds market under its coverage was also weak as average yield increased 52 bps week on week to 5.2%.
The leading investment firm however noted that the ESKOM HOLDINGS 2021 instrument was the major loser following a 111 bps rise in yield.
On the flip side, the ESKOM HOLDINGS 2025 and FIDELITY 2022 instruments saw high demand which pushed yield higher by 40 bps and 26 bps respectively.
“In the coming week, we expect to see a muted outing in the domestic bond as investors wait on the sideline ahead of the first auction of the year”, Afrinvest said.
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Market Wrap: Domestic Bond Market Remains Downbeat
