The local bond market remained negative last week as yields soared across tenors on all trading sessions. Precisely, average yield on benchmark bonds closed at 15.2 per cent on Friday, up 10 basis points (bps) week-on-week.
The week started on a negative note, largely driven by two bps increase in medium- to long-term bonds yield, and persisted through the week as sentiment remained negative.
The negative run was attributed to investors’ expectation for October Inflation report (scheduled for release this week) and traders preference for dealing at the shorter end of the curve (T-bills and OMO) which witnessed increased activity last week with several primary market issuances.
The Consumer Price Index (CPI), which measures inflation, had increased to 17.9 per cent in September from 17.6 per cent it stood the previous month.
Yields on all Gabon, Côte d’Ivoire, Kenya, Zambia and Senegal Sovereign Eurobonds rose W-o-W. Yield on Nigeria’s 5-Year Note maturing in 2018 dropped three bps week-on-week to 4.6 per cent but rose on the 2013 instrument by eight bps to seven per cent.
But longer-dated South African Sovereign bonds surprisingly fell, despite the political turmoil gripping the country, but shorter term yields for instruments maturing between 2017 and 2020 rose.
