AFRICA-DEBT-Nigeria bonds to rise on election jitters

(Reuters) – The yields on Nigerian bonds are seen rising next week on uncertainty over a delayed presidential election, while Kenyan Treasury bill yields will ease further on increased liquidity.


Nigerian bonds yields will rise as Africa’s biggest economy 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, traders added.

The continent’s largest oil producer is facing a faltering economy after global oil prices plunged, weakening the naira.

Nigeria raised 91 billion naira ($455 million) in bonds this week, with maturities ranging between 5-year and 20-year at higher returns across the board.

“Trading is expected to be mixed next week but the market would likely stay above the 16 percent resistance level,” one dealer said.

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.

The benchmark 2024 debt note however rose sharply to 16.63 percent from 16.13 percent last week.


The yields on Kenyan Treasury bills are expected to continue edging lower next week on the back of increased shilling liquidity, traders said.

The central bank will auction 91-day, 182-day and 364-day Treasury bills worth a total 8 billion shillings ($87 million).

“The general trend downwards should persist … but not as aggressively,” Mathangani Kariuki, a bond trader at Kestrel Capital, said.

Kariuki said Treasury yields had slipped 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, traders said.

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.

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.

($1 = 91.6500 Kenyan shillings)

($1 = 200.0000 naira)