Bullish run in Eurobonds market to persist due to sustained demand this week

Domestic market is expected to sustain bearish performance as investors position for the auction

PERFOR MANCE IN THE SECONDARY market turned bearish yet again last week as average yield rose 8 basis points week on week to 7.7 per cent. Although the market gained on 4 of 5 trading days, a 28 basis points rise in yields on Tuesday outstrip the gains recorded on the other days. Across tenors, the short-term bonds recorded the most sell-offs with yields rising 121 basis points week on week. The mid-term instruments also recorded a 2 basis points rise in yields while yields declined 77 basis points at the long end.

Across the SSA Eurobond instruments under coverage, the performance was bullish as all instruments gained week on week and average yield declined 26 basis points to 8.2 per cent. The SENEGAL 2021 and GHANA 2029 instruments enjoyed the highest demand, with the yields declining 55bps and 50 basis points week on week respectively. Similarly, the NIGERIA 2030 and 2027 instruments recorded gains as yields fell 48 basis points and 46 basis points respectively.

For the African Corporate Eurobonds that we tracked, the performance was mixed although positively skewed as average yield declined 13 basis points week on week to 4.9 per cent. SIBANYE GOLD 2023 instruments led the pack with the yield declining 2.6 basis points week on week. ECOBANK 2024 also recorded gains and the yield declined 91 basis points from last week. Conversely, ESKOM HOLDINGS 2021 recorded the highest selloffs with the yield rising 1.9 basis points from the previous week.