Bonds Market: Domestic Bond Market Extended Bullish Run

This week, the bullish sentiments in the bond market was sustained as average yield continued to dwindle, down 37bps to 6.3%. The trading session kicked-off on Monday with average yield rising 3bps following sell-offs on short tenor bonds. However, the market closed on a positive on the remaining trading days. Across tenors, the medium-term instruments recorded the most buying interest with the average yield down 63bps w/w. Similarly, average yield on the long and short-term instruments declined 18bps apiece w/w.

Across the SSA Eurobonds space, there was a bullish performance as average yield fell 55bps w/w to 9.5%. The Nigeria 2021 and Senegal 2021 instruments recorded the most buy interest as the respective yields fell 182bps and 82bps w/w. Trailing, yield on the Nigerian 2032 and Senegal 2031 instruments declined 81bps and 80bps w/w respectively. Conversely, Ghana 2022 and Zambia 2022 recorded sell-offs with the yields rising 22bps and 13bps w/w respectively.

Performance at the African Corporate Eurobonds market under our coverage was positive as average yield declined 33bps w/w to 5.9% (ex-SIBANYE GOLD 2023 instrument). ESKOM HOLDINGS 2021 and 2025 instruments saw strong demand, driving a 102bps and 83bps drop in yield respectively. Conversely, the FIRSTRAND BANK LTD 2028 and ZENITH BANK PLC 2022 recorded sell-offs, as the respective yields rose 2bps and 1bp. In the coming week, we expect yields to fall in the domestic bond market while we expect sustained interest in the Eurobonds segment.