Bonds Market Review: Domestic Bonds Market Opens Year Bearish

The domestic bonds market ended the first trading week of the year on a bearish note, as average yield rose 24bps to 6.3% following sell pressures on 4 of the 5 trading days. Across tenors, the long-term instrument recorded the most sell-offs as yields advanced 38bps w/w. Trailing, the medium-term and short-term instruments rose 21bps and 8bps w/w respectively. 

Across the SSA Eurobonds space, price appreciation drove performance leading to a bullish outing as average yield fell 6bps w/w to 7.6%. The NIGERIAN 2021, GABON 2024 and NIGERIAN 2027 instruments recorded the most buying interest as yields declined 52bps, 50bps and 39bps w/w respectively. Conversely, yields on the GHANA 2022 and SENEGAL 2021 instruments rose 2.7% and 0.9% w/w respectively.

At the African Corporate Eurobonds market under our coverage, performance was positive as average yield dipped 1.4% w/w to 4.6%. The ESKOM HOLDINGS 2021 and ACCESS BANK 2021 instruments posted a bullish performance as yields declined 21.5% and 2.7% w/w respectively. On the other hand, the NEERG ENERGY 2022 and OFFICE CHERIFIEN 2024 instruments recorded a sell-off as yields rose 93bps and 15bps w/w respectively. In the coming week, we expect yields to fall at the domestic bond market while in the Eurobond markets, we expect performance to be positive as yields remain attractive.