Money Market Rates

Sell-offs Persist in the Domestic Bonds Market, says Afrinvest

Average yield rose by 32 basis points (bps) week on week to 10.4% in the domestic bonds market this week.

Although 5 instruments gained, Afrinvest stated that market performance largely tilted towards the bears as 14 bonds saw an increase in their respective yields.

The FGN 2027 bond led the gainers with a 0.2% drop in its yields to 11.0% while the FGN 2023 and 2024 instruments led the laggards following 0.9% and 1.2% jump in their respective yields to 9.2% and 9.6%.

Meanwhile, analysts explained that the week started on a bearish note, as yields climbed 2 basis points on Monday and 28 basis points on Tuesday.

Conversely, the market maintained a bullish streak on Wednesday (-4bps) and Thursday (-3bps) as buying interest crept into the market.

However, bearish sentiment resurfaced on Friday as average yield jumped 8 basis points.

At the Sub-Saharan Africa (SSA) Eurobonds segment, investors maintained a bullish sentiment as average yield dropped 49 bps this week compare to previous week to 11.7%.

Afrinvest said 23 of 31 SSA Eurobonds that it covers recorded declines in their respective yields while 8 were bearish.

Average Yield on T-Bills drops to 3.9%

Yields on the ZAMBIA 2022 and 2024 instruments dropped 2.5% and 2.1% week on week respectively to 48.7% and 37.1% as they led gainers.

Conversely, the KENYA 2024 and 2028 instruments recorded the most sell-offs as their respective yields jumped 61 bps and 71 bps to 9.0% and 9.1%.

Similarly, bullish sentiment crept into the corporate segment of the Eurobond Market as average yield fell 97 bps week on week to 8.6%.

“Performance was largely bullish as 15 of 21 instruments that we cover gained”, Afrinvest stated.

The ESKOM HOLDINGS 2021 and 2025 Eurobonds drove gains with their respective yields sinking 9.4% and 4.3% week on week in that order to 14.2% and 11.4%.

Conversely, OFFICE CHERIFIEN’s 2024 and 2025 instruments led the laggards as their respective yields advanced 86 bps and 65 bps to 4.4% and 4.5%.

“In the coming week, we expect a sustained bearish performance in the domestic market while we anticipate that bullish performance would persist in the Eurobond segment on the back of increased oil prices and relaxation of economic lockdowns”, Afrinvest stated.

Sell-offs Persist in the Domestic Bonds Market, says Afrinvest