NAIROB – Kenyan Treasury bills are expected to get good demand at auction next week, putting downward pressure on yields while Nigerian bond yields could rise over political uncertainty.
KENYA
Kenyan Treasuries are expected to get good demand at auction next week, mainly due to improved liquidity as the government pays workers and suppliers at the end of the month, putting downward pressure on yields.
The central bank will sell 91-day, 182-day and 364-day Treasury bills worth a total of 8 billion shillings ($87.53 million).
“We see lower Treasury bills yields next week due to high demand from banks,” said Alex Muiruri, fixed income trader at Kestrel Capital.
The yield on the 91-day Treasury bill edged up at this week’s auction to 8.645 percent while those on the six-month and one year bills inched down.
NIGERIA
Yields on Nigerian debt are seen trending up next week over political uncertainty after the six-week postponement of the Feb. 14 presidential elections. Nigeria is expected to hold its general election on March 28 and April 11.
The currency of Africa’s top oil producer has also tumbled after concern grew about political stability exacerbating a fall triggered when global oil prices collapsed.
“We anticipate yields trending up as a number of investors will be cautious toward the period of election as the political risk heightens,” one dealer said.
Traders said tight liquidity early in the week caused some bond holders to cut back their positions to get cash for operations, but yields fell toward the end of the week.
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Yields on the 2016 debt closed at 16.42 percent, down from 16.85 percent last week. The 2022 paper traded at 16 percent against 16.20 percent.
The benchmark 2024 debt note closed at 16.04 percent compared with 16 percent last week.
(REUTERS)