Bond market witnesses surge with 91.52% upturn in turnover
In a notable uptick, the secondary bond market experienced a remarkable 91.52% surge in turnover, surging to ¢336.87 million on a week-on-week basis. This remarkable development signals a revival in activities within the bond market.
Notably, the aggregate market turnover’s upturn can be attributed to a substantial 92.54% rise in trading volumes across short-dated new bonds. This surge in trading volumes indicates growing investor interest in this segment.
Adding to the market dynamics, the Local Currency Yield curve has taken a northward tilt, showcasing an upward trajectory in bond yields across various maturities. Particularly noteworthy is the 113 basis points increase in average yield at the belly of the yield curve, signifying greater investor demand for intermediate-maturity bonds.
However, analysts have expressed caution, citing the potential downside brought forth by the recent decision of the Monetary Policy Committee (MPC) to raise the policy rate to 30%. This move could likely favor treasury bills, which are now boasting attractive yields, consequently overshadowing existing bonds.
While the bond market enjoys an upswing in activity, it remains to be seen how the balance between bonds and treasury bills will be affected in the wake of the MPC’s decision. Market participants are keenly observing how the landscape evolves in response to the shifting policy environment.
