• Monday, March 04, 2024
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AFRICA DEBT: Nigerian bonds to rise slightly next week

The yields on Kenya’s Treasury bills are seen holding steady while yields on Nigeria’s bonds are expected to rise slightly over the next week, traders said on Friday.

NIGERIA

Yields on Nigerian bonds are seen up slightly at an auction next week, in tandem with market sentiment this week as some offshore investors and local pension positioned ahead of the auction.

Traders said some offshore and local pension are shielding weight ahead of bid at the auction next Wednesday where 100 billion naira ($614.06 million) in 3-, 10- and 20-year bond will be offered by the Debt Management Office.

“Most offshore investors and local pensions are selling down their holdings in preparation to take position at the auction next week,” one dealer said.

Dealers said bonds bought at the auction usually attracted better returns for investors, hence the sell-off ahead of the auction on the secondary market.

Yields have climbed around 50 basis points across the board on the most active traded bonds on the secondary market this week due to profit taking by investors, traders said.

Nigeria’s 2022 maturity was trading at 20.11 bid on Friday, while the 2024 paper was at 12.17 percent, both around 50 basis points higher than they opened on Monday, traders said

KENYA

Yields on Kenya’s Treasury bills are expected to hold steady in next week’s auction, with more attention paid to the longer dated 364-day Treasury bills due to the double-digit rate.

Next week, the central bank will auction 91-day, 182-day and 364-day Treasury bills worth a total 12 billion shillings.

At this week’s sale, the weighted average yield on the 91-day Treasury bills rose slightly to 8.219 percent from 8.187 percent last week, the central bank said.

The yield on the 364-day Treasury bills eased to 10.163 percent from 10.233 percent, while that on the 182-day bills stayed unchanged at 8.550 percent.

Traders said they saw little change in the yields at the next auction.

“The trend we have seen in the recent past should persist. CBK is very keen on keeping a lid on T-bills, so you wont expect rates to go up. So it will be relatively flat,” Faith Atiti, research analyst at Commercial Bank of Africa, said.

“I expect subscription should remain high, particularly on the 364-day, should improve, given at least it’s giving double-digit returns.”