Treasury bond prices are continuing to head south thus creating openings for debt investors to squeeze in higher yields.
The bond prices, across the board, have gone down to push demand up as investors capitalised not only on prices but also on increased yield-to-maturity.
Orbit Securities said in its weekly market synopsis that the yield for the 10-year bond rose by 31.96 basis points to 10.77 per cent.
"Currently," Orbit report issued on Tuesday said, "government bond prices are on a downward trend creating opportunities for investors to squeeze in higher yields".
The average price for 10 years Treasury bond auctioned last Wednesday dropped to 96/83 compared to 98/74 in September while the minimum successful price was 94/-.
Vertex International Securities said in the weekly market review that the 10 years government bond auction results echoed their last week's forecast as yields continued to climb.
"We expect a further increase in yields [this] week during Treasury bill auction [today]" Vertex said.
The yield-to-maturity for 20 years bond auctioned last month went up slightly to 12.229 per cent from 12.106 per cent in September. The price dropped to 99/011 from 99/95.
For 25 years bond, the darling of investors, the yield rose to 12.56 per cent from 12.43 per cent in July, while the price dropped to 99/94 from 100/92.
Commenting on the 20-year bond auction results, Alpha Capital said in its Financial Markets Digest that "the results communicated a policy stance".
The central bank sought to raise 136.23bn/- for a 12.10per cent coupon rate paid semi-annually for 20 years, before a bullet principal repayment on the last disbursement. That was the fourth consecutive 20 years bond auction with an upward movement of the yield.
"The bond was oversubscribed by 62 per cent... .In a staggering move, the central bank accepted all 286 bids including the lowest bid price of 93/76 compared to the minimum successful price of 98/52 during the previous 20 years Treasury bond auction" Alpha Capital report showed.
The rising yield was in tandem with the Monetary Policy Committee's advice to the central bank to gradually reduce liquidity from the economy to curb the looming inflationary pressures.
