Kenya's 2-year bond seen drawing investors

Nigeria's central bank gov, Emefiele

Kenya's sale of a re-opened two-year Treasury bond next week is likely to meet with good demand from investors while yields on Nigerian Treasuries could fall due to good liquidity in the markets.
KENYA
Investors are likely to pile into next week's sale of a Kenyan 2-year Treasury bond to the detriment of Treasury bills, amid expectations the average yield on bills could fall further.
The central bank will auction the re-opened bond, worth up to 10 billion shillings ($114 million), on July 23. Traders said they expected the bond to come with an interest rate of 10.70 percent, a higher return than bills.
"Liquidity will be skewed to the bond issue," said Alex Muiruri, a fixed-income trader at Kestrel Capital.
Kenyan treasury bill yields, which have been coming off this month after the government cut its weekly borrowing by a quarter to 9 billion shillings, were expected to fall by another 40 basis points on average, market participants said.
The yield on the benchmark 91-day Treasury bills slid to 9.274 percent at this week's auction from 9.727 percent a week earlier.
Yields on six months bills and 364-day Treasury bills dropped at auction to 10.430 percent and 10.558 percent respectively.
NIGERIA
Yields on Nigerian Treasury bills are expected to fall further next week as liquidity improves following the disbursement of monthly budget allocations to government agencies.
Traders said liquidity will also be buoyed by a slowdown in the central bank's Open market Operations (OMO), boosting demand at the sale of 134.88 billion naira ($832.90 million) worth of Treasury bills, scheduled for Wednesday.
"Yields have dropped by around 20 basis points across the board on the secondary market this week alone because there has not been regular issuance of OMO bills by the central bank," one dealer with GTBank said.
Nigeria, Africa's top energy producer, distributes revenues from oil exports among its three tiers of government - federal, states and local - on a monthly basis and the bulk of the funds pass through commercial banks.