By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE)-The yields on Nigerian bonds are likely to rise next week on uncertainty over a delayed presidential election, according to a Reuters report.
The report says Nigerian bonds yields will rise as the nation prepares to hold presidential elections on March 28, while a planned Monetary Policy Committee (MPC) meeting to set rates on March 24 would also unnerve investors, the report quoted traders.
Nigeria facing a dwindling economy on the heels of sliding global oil prices and weakening naira raised N91 billion ($455 million) in bonds this week, with maturities ranging between 5-year and 20-year at higher returns across the board, the report affirmed.
It quoted a dealer as saying “Trading is expected to be mixed next week but the market would likely stay above the 16 percent resistance level.”
According to the report, yields on the 2016 debt closed flat at 16.15 percent compared with 16.16 percent last week, while the 2022 debt note dropped to 16.03 percent from 16.07 percent previously.
It further affirmed that the benchmark 2024 debt note however climbed up sharply to 16.63 percent from 16.13 percent last week.
Similarly, the report quoted a trader as saying that Kenyan Treasury bill yields will ease further on increased shilling liquidity.
It said the Kenyan Central Bank will auction 91-day, 182-day and 364-day Treasury bills worth a total 8 billion shillings ($87 million).
Mathangani Kariuki, a bond trader at Kestrel Capital, was quoted as saying “The general trend downwards should persist … but not as aggressively,”
He added that Treasury yields had dropped in recent weeks amid high liquidity as a result of increased government spending and debt which had matured in February and March.
“Government salary payments and allocations to regional authorities had led to increased liquidity in the market, the report quoted traders.
It says at this week’s sale, the weighted yield on the 91-day Treasury bills edged down to 8.453 percent from 8.463 percent last week, while the yield on 182-day T-bills also dropped to 10.356 percent from 10.375 percent.
The yields on the 364-day paper slipped to 10.636 percent from 10.768 percent.
According to the report, some traders have previously said investors could wait for the sale of a 12-year infrastructure bond worth up to 25 billion shillings on March 25, further adding downward pressure on Treasury bill yields.
