Bonds yields decline 7 basis points at 13.7%

 

Performance in the local bond market was bullish this week as average yield declined week on week following expectations of a possible retention of key monetary policy rates, at the end of the Monetary Policy Committee (MPC) meeting held on the 3rd and 4th of April 2018, and continued investor reaction to sustained moderation in headline inflation. Average yield across tenors opened the week 7 basis points lower to settle at 13.7 percent on Tuesday (from 13.8 percent recorded the prior week) consequent on buying interest across tenors particularly short and longer dated instruments. Yields on the MAY 2018, JUN 2021, JAN 2022 and MAR 2036 fell 50 basis points, 21 basis points, 11 basis points and 13 basis points respectively.
The bullish sentiment persisted till mid-week as average yield further moderated 5bps to 13.7 percent before marginally rising 1bp on Thursday largely on the back of sell-offs across tenors most notably, the MAY 2018 instrument (up 15bps to 14.5 percent). The bearish performance on Thursday could also be attributable to the resumption of Open Market Operation (OMO) auctions by the Central Bank of Nigeria (CBN). Average yield closed the week at 13.7 percent on Friday, indicating an 8 basis points decline week on week.
Meanwhile, across Sub-Saharan African Sovereign Eurobonds, performance was broadly positive as yields trended lower week on week on all instruments, save the KENYA 2019 (-3 basis points). The bullish sentiment persisted from the prior week following sustained buying interest in emerging market assets. Consequently, average yield across the Nigerian, Ghanaian, Ivorian, Kenyan, Zambian, Senegalese and South African Eurobonds fell 10 basis points, 10 basis points, 20 basis points, 30 basis points, 10 basis points, 30 basis points, 10 basis points and 2 basis points respectively. Contrarily, Performance across the Nigerian Corporate Eurobonds was largely bearish as yields on 10 of 12 instruments trended northwards week on week. The DIAMOND 2019 instrument witnessed the most sell-offs (up 37bps to 8.9 percent) while the GTBANK 2018 instrument recorded the most buying interest (down 6 basis points to 2.8 percent). The best performing instruments year to date are DIAMOND 2019 and FBN 2021 instruments, up 3.3 percent and 3.2 percent year to date respectively.